Exhibit 10.4
WHEN RECORDED RETURN TO:
XXXXXX & XXXXXX L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
MORTGAGE, ASSIGNMENT OF PRODUCTION,
SECURITY AGREEMENT AND FINANCING STATEMENT
FROM
EEX OPERATING L.P.
TO
JPMORGAN CHASE BANK,
as Administrative Agent
A CARBON, PHOTOGRAPHIC, OR OTHER REPRODUCTION OF THIS
INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.
THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.
THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.
THIS INSTRUMENT COVERS AS-EXTRACTED COLLATERAL.
THIS INSTRUMENT COVERS MINERALS AND OTHER SUBSTANCES OF VALUE WHICH MAY BE
EXTRACTED FROM THE EARTH (INCLUDING WITHOUT LIMITATION OIL AND GAS) AND ACCOUNTS
ARISING OUT OF THE SALE OF OIL, GAS AND OTHER MINERALS AT THE WELLHEADS OF THE
WELL OR XXXXX LOCATED ON THE PROPERTIES DESCRIBED IN THE EXHIBITS HERETO.
PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS WHICH ARE TO BECOME AFFIXED TO OR
FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN THE EXHIBITS HERETO AND IS
FILED AS A FIXTURE FILING. THIS FINANCING STATEMENT IS TO BE FILED OR FILED FOR
RECORD, AMONG OTHER PLACES, WITH A CLERK OF COURT (OR, AS TO ORLEANS PARISH, THE
RECORDER OF MORTGAGES) IN ANY PARISH IN THE STATE OF LOUISIANA. THE MORTGAGOR
HAS AN INTEREST OF RECORD IN THE REAL ESTATE CONCERNED, WHICH INTEREST IS
DESCRIBED IN THE EXHIBITS ATTACHED HERETO.
TABLE OF CONTENTS
Page
ARTICLE I GRANT OF LIEN AND INDEBTEDNESS SECURED............................................... 1
Section 1.01 Grant of Liens.............................................................. 1
Section 1.02 Grant of Security Interest.................................................. 4
Section 1.03 Indebtedness Secured........................................................ 4
Section 1.04 Pro Rata Benefit............................................................ 5
Section 1.05 Defined Terms............................................................... 6
ARTICLE II ASSIGNMENT OF PRODUCTION............................................................ 6
Section 2.01 Assignment.................................................................. 6
Section 2.02 No Modification of Payment Obligations...................................... 7
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS.......................................... 7
Section 3.01 Title....................................................................... 7
Section 3.02 Defend Title................................................................ 7
Section 3.03 Not a Foreign Person........................................................ 7
Section 3.04 Power to Create Lien and Security........................................... 8
Section 3.05 Revenue and Cost Bearing Interest........................................... 8
Section 3.06 Rentals Paid; Leases in Effect.............................................. 8
Section 3.07 Operation By Third Parties.................................................. 8
Section 3.08 Abandon, Sales.............................................................. 8
Section 3.09 Failure to Perform.......................................................... 8
ARTICLE IV RIGHTS AND REMEDIES................................................................. 9
Section 4.01 Event of Default............................................................ 9
Section 4.02 Foreclosure and Sale........................................................ 9
Section 4.03 Substitute Trustees and Agents.............................................. 10
Section 4.04 Judicial Foreclosure; Receivership.......................................... 10
Section 4.05 Foreclosure for Installments................................................ 10
Section 4.06 Separate Sales.............................................................. 11
Section 4.07 Possession of the Mortgaged Property........................................ 11
Section 4.08 Occupancy After Foreclosure................................................. 11
Section 4.09 Remedies Cumulative, Concurrent and Nonexclusive............................ 11
Section 4.10 No Release of Obligations................................................... 12
Section 4.11 Release of and Resort to Collateral......................................... 12
Section 4.12 Waiver of Redemption, Notice and Marshalling of Assets, Etc................. 12
Section 4.13 Discontinuance of Proceedings............................................... 13
Section 4.14 Application of Proceeds..................................................... 13
Section 4.15 Resignation of Operator..................................................... 13
Section 4.16 Indemnity................................................................... 13
ARTICLE V MISCELLANEOUS........................................................................ 14
Section 5.01 Instrument Construed as Mortgage, Etc....................................... 14
Section 5.02 Release of Mortgage; Release Upon Partial Payment........................... 14
Section 5.03 Severability................................................................ 15
Section 5.04 Successors and Assigns of Parties........................................... 15
Section 5.05 Satisfaction of Prior Encumbrance........................................... 15
Section 5.06 Subrogation of Trustee...................................................... 15
i
Section 5.07 Nature of Covenants......................................................... 15
Section 5.08 Notices..................................................................... 15
Section 5.09 Counterparts................................................................ 16
Section 5.10 Governing Law............................................................... 16
Section 5.11 Financing Statement......................................................... 16
Section 5.12 Exculpation Provisions...................................................... 17
Section 5.13 References.................................................................. 18
ARTICLE VI SPECIAL LOUISIANA PROVISIONS........................................................ 18
Section 6.01 Maximum Amount.............................................................. 18
Section 6.02 Keeper...................................................................... 18
Section 6.03 Confession of Judgment...................................................... 18
Section 6.04 Waivers..................................................................... 18
Section 6.05 Notary Public............................................................... 19
Section 6.06 No Paraph................................................................... 19
Exhibit A - Hydrocarbon Property
Exhibit B - Certified Resolutions
ii
MORTGAGE, ASSIGNMENT
OF PRODUCTION, SECURITY AGREEMENT AND FINANCING STATEMENT
BE IT KNOWN, that on this ____ day of _________ 2002, before me, the
undersigned Notary Public, duly commissioned and qualified, personally came and
appeared:
EEX Operating L.P., a Texas limited partnership (the "Mortgagor"),
whose federal taxpayer identification number is 00-0000000 and
whose address is 0000 XxxxXxxx Xxxx., Xxxxx 0000 Xxxxxxx, Xxxxx
00000, appearing herein through EEX Corporation, its general
partner, appearing herein through its undersigned officer, duly
authorized pursuant to resolutions of its Board of Directors, a
certified copy of which is attached hereto as Exhibit B,
who declared and acknowledged an indebtedness unto and grants this MORTGAGE,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT AND FINANCING STATEMENT (this
"Mortgage") in favor of JPMORGAN CHASE BANK, as Administrative Agent (in such
capacity, together with its successors in such capacity, the "Mortgagee") for
its benefit and the benefit of the Lenders and the other holders of the
Indebtedness (as hereinafter defined).
R E C I T A L S
A. EEX Operating L.P., as the "Borrower" under the Credit Agreement (as
hereinafter defined), and EEX Corporation (together with the Borrower, each an
"Obligor") have executed a certain Credit Agreement dated May 28, 2002 (such
agreement, as may from time to time be amended or supplemented, called the
"Credit Agreement") pursuant to which, upon the terms and conditions stated
therein, the Lenders agree to make loans to the Borrower.
B. Mortgagee has conditioned its obligations under the Credit Agreement
upon the execution and delivery by Mortgagor of this Mortgage, and Mortgagor has
agreed to enter into this Mortgage.
C. Therefore, in order to comply with the terms and conditions of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby agrees with
Mortgagee as follows:
ARTICLE I
GRANT OF LIEN AND INDEBTEDNESS SECURED
Section 1.01 Grant of Liens. To secure payment of the Indebtedness and the
performance of the covenants and obligations herein contained, the Mortgagor
does by these presents hereby GRANT, HYPOTHECATE, MORTGAGE, PLEDGE AND ASSIGN
unto and in favor of Mortgagee for its benefit and the benefit of the Lenders
and the other holders of the Indebtedness (hereinafter defined) the real and
personal property, rights, titles, interests and
estates described in the following paragraphs (a) through (h) (collectively
called the "Mortgaged Property"):
(a) All rights, titles, interests and estates now owned or hereafter
acquired by the Mortgagor in and to the oil and gas leases and/or oil, gas and
other mineral leases, mineral servitudes, royalties, mineral interests and other
interests and estates and the lands and premises covered or affected thereby
which are described on Exhibit A hereto (collectively called the "Hydrocarbon
Property") or which Hydrocarbon Property is otherwise referred to herein, and
specifically, but without limitation, the undivided interests of the Mortgagor
which are more particularly described on attached Exhibit A.
(b) All rights, titles, interests and estates now owned or hereafter
acquired by the Mortgagor in and to (i) the properties now or hereafter pooled
or unitized with the Hydrocarbon Property; (ii) all presently existing or future
unitization, communitization, pooling agreements and declarations of pooled
units and the units created thereby (including, without limitation, all units
created under orders, regulations, rules or other official acts of any Federal,
State or other governmental body or agency having jurisdiction and any units
created solely among working interest owners pursuant to operating agreements or
otherwise) which may affect all or any portion of the Hydrocarbon Property
including, without limitation, those units which may be described or referred to
on attached Exhibit A; (iii) all operating agreements, production sales or other
contracts, farmout agreements, farm-in agreements, area of mutual interest
agreements, gas balancing agreements, equipment leases and other agreements
described or referred to in this Mortgage or which relate to (A) any of the
Hydrocarbon Property or interests in the Hydrocarbon Property described or
referred to herein or on attached Exhibit A or (B) the production, sale,
purchase, exchange, processing, handling, storage, transporting or marketing of
the Hydrocarbons (as hereinafter defined) from or attributable to such
Hydrocarbon Property or interests; (iv) all geological, geophysical,
engineering, accounting, title, legal and other technical or business data
concerning the Mortgaged Property, the Hydrocarbons or any other item of
Property which are in the possession of the Mortgagor and in which the Mortgagor
can grant a security interest without violating any restrictions on assignment
therein, and all books, files, records, magnetic media, computer records and
other forms of recording or obtaining access to such data; and (v) the
Hydrocarbon Property described on attached Exhibit A and covered by this
Mortgage even though the Mortgagor's interests therein be incorrectly described
or a description of a part or all of such Hydrocarbon Property or the
Mortgagor's interests therein be omitted; it being intended by the Mortgagor and
the Mortgagee herein to cover and affect hereby all interests which the
Mortgagor may now own or may hereafter acquire in and to the Hydrocarbon
Property notwithstanding that the interests as specified on Exhibit A may be
limited to particular lands, specified depths or particular types of property
interests.
(c) All rights, titles, interests and estates now owned or hereafter
acquired by the Mortgagor in and to all oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
therefrom and all other minerals (collectively called the "Hydrocarbons") which
may be produced and saved from or attributable to the Hydrocarbon Property, the
lands pooled or unitized therewith and the Mortgagor's interests therein,
including all oil in tanks and all rents, issues, profits, proceeds, products,
revenues and other income from or attributable to the Hydrocarbon Property, the
lands pooled or unitized
therewith and the Mortgagor's interests therein which are subjected or required
to be subjected to the liens and security interests of this Mortgage.
(d) All tenements, hereditaments, appurtenances and properties in anywise
appertaining, belonging, affixed or incidental to the Hydrocarbon Property,
rights, titles, interests and estates described or referred to in paragraphs (a)
and (b) above, which are now owned or which may hereafter be acquired by the
Mortgagor, including, without limitation, any and all property, real or
personal, now owned or hereafter acquired and situated upon, used, held for use,
or useful in connection with the operating, working or development of any of
such Hydrocarbon Property or the lands pooled or unitized therewith (excluding
drilling rigs, trucks, automotive equipment or other personal property which may
be taken to the premises for the purpose of drilling a well or for other similar
temporary uses) and including any and all oil xxxxx, gas xxxxx, injection xxxxx
or other xxxxx, buildings, structures, off-shore production or drilling
platforms and related equipment (both above and below the surface), field
separators, liquid extraction plants, plant compressors, pumps, pumping units,
pipelines, sales and flow lines, gathering systems, field gathering systems,
salt water disposal facilities, tanks and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements, servitudes, licenses and other surface
and subsurface rights together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing properties.
(e) Any property that may from time to time hereafter, by delivery or by
writing of any kind, be subjected to the lien and security interest hereof by
the Mortgagor or by anyone on the Mortgagor's behalf; and Mortgagee is hereby
authorized to receive the same at any time as additional security hereunder.
(f) All of the rights, titles and interests of every nature whatsoever now
owned or hereafter acquired by the Mortgagor in and to the Hydrocarbon Property
rights, titles, interests and estates and every part and parcel thereof,
including, without limitation, the Hydrocarbon Property rights, titles,
interests and estates as the same may be enlarged by the discharge of any
payments out of production or by the removal of any charges or Permitted
Encumbrances (as hereinafter defined in Section 3.01) to which any of the
Hydrocarbon Property rights, titles, interests or estates are subject, or
otherwise; all rights of the Mortgagor to liens and security interests securing
payment of proceeds from the sale of production from the Mortgaged Property;
together with any and all renewals and extensions of any of the Hydrocarbon
Property rights, titles, interests or estates; all contracts and agreements
supplemental to or amendatory of or in substitution for the contracts and
agreements described or mentioned above; and any and all additional interests of
any kind hereafter acquired by the Mortgagor in and to the Hydrocarbon Property
rights, titles, interests or estates.
(g) All of Mortgagor's right, title and interest now owned or hereafter
acquired in and to any commodity, interest rate or currency swap, cap, floor,
collar, forward agreement, including fixed price forward physical delivery
contracts, or other exchange or protection agreements or any option with respect
to any such transaction.
(h) All accounts, contract rights, equipment, fixtures, inventory, general
intangibles, insurance contracts and insurance proceeds constituting a part of,
relating to or arising out of those portions of the Mortgaged Property which are
described in paragraphs (a) through (g) above and all proceeds and products of
all such portions of the Mortgaged Property and payments in lieu of production
(such as "take or pay" payments), whether such proceeds or payments are goods,
money, documents, instruments, chattel paper, securities, accounts, general
intangibles, fixtures, real property or other assets.
Any fractions or percentages specified on attached Exhibit A in referring
to the Mortgagor's interests are solely for purposes of the warranties made by
the Mortgagor pursuant to Section 3.01 and Section 3.05hereof and shall in no
manner limit the quantum of interest affected by this Section 1.01 with respect
to any Hydrocarbon Property or with respect to any unit or well identified on
said Exhibit A.
The Mortgaged Property is to remain so specially mortgaged, affected and
hypothecated unto and in favor of Mortgagee and its successors and assigns until
the full and final payment or discharge of the Indebtedness, and Mortgagor is
herein and hereby bound and obligated not to sell or alienate the Mortgaged
Property to the prejudice of this Mortgage.
Section 1.02 Grant of Security Interest. To further secure the
Indebtedness, the Mortgagor hereby grants to the Mortgagee for its benefit and
the benefit of the Lenders and the other holders of the Indebtedness, a security
interest in and to the Mortgaged Property (whether now or hereafter acquired by
operation of law or otherwise) insofar as the Mortgaged Property consists of
equipment, as-extracted collateral, accounts, chattel paper, documents,
instruments, goods, supporting obligations, general intangibles, insurance
contracts, insurance proceeds, inventory, Hydrocarbons, fixtures, proceeds and
any and all other personal property of any kind or character defined in and
subject to the provisions of the Uniform Commercial Code presently in effect in
the State of Louisiana (the "Applicable UCC"), including the proceeds and
products from any and all of such personal property. Upon the happening of any
Event of Default, the Mortgagee is and shall be entitled to all of the rights,
powers and remedies afforded a secured party by the Applicable UCC with
reference to the personal property and fixtures in which the Mortgagee has been
granted a security interest herein, and the Mortgagee may proceed as to both the
real and personal property covered hereby in accordance with the rights and
remedies granted under this Mortgage in respect of the real property covered
hereby. Such rights, powers and remedies shall be cumulative and in addition to
those granted to the Mortgagee under any other provision of this Mortgage or
under any other Security Instrument. Written notice mailed to the Mortgagor as
provided herein at least ten (10) days prior to the date of public sale of any
part of the Mortgaged Property which is personal property subject to the
provisions of the Applicable UCC, or prior to the date after which private sale
of any such part of the Mortgaged Property will be made, shall constitute
reasonable notice.
Section 1.03 Indebtedness Secured. This Mortgage is executed and delivered
by the Mortgagor to secure and enforce the following (the "Indebtedness"):
(a) Payment of and performance of any and all indebtedness, obligations and
liabilities, including interest (including, without limitation, interest
accruing after the maturity of the Loans made by each Lender and interest
accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Obligors, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) of the Obligors pursuant
to the Credit Agreement or any other Loan Document, whether now existing or
hereafter arising and being in the original principal amount of up to two
hundred fifty million United States Dollars (US $250,000,000) with final
maturity on or before March 31, 2003 (unless otherwise amended pursuant to the
Credit Agreement).
(b) Any sums which may be advanced or paid by the Mortgagee or any Lender
under the terms hereof or of the Credit Agreement or any Loan Document on
account of the failure of the Mortgagor or the Obligors, as applicable, to
comply with the covenants of the Mortgagor or the Obligors, as applicable,
contained herein or in the Credit Agreement or any other Loan Document; and all
other indebtedness of the Mortgagor arising pursuant to the provisions of this
Mortgage.
(c) Payment of and performance of any and all present or future obligations
of the Obligors and their Subsidiaries according to the terms of any present or
future interest rate or currency swap, rate cap, rate floor, rate collar,
forward rate agreement or other exchange or rate protection agreements or any
option with respect to any such transaction now existing or hereafter entered
into between any Obligor or any Subsidiary of an Obligor and any Lender (or any
Affiliate of such Lender), but only to the extent that such agreements are
permitted by the terms of the Credit Agreement.
(d) Payment of and performance of any and all present or future obligations
of the Obligors and their Subsidiaries according to the terms of any present or
future swap agreements, cap, floor, collar, forward agreement or other exchange
or protection agreements relating to crude oil, natural gas or other
hydrocarbons or commodities or any option with respect to any such transaction
now existing or hereafter entered into between any Obligor or any Subsidiary of
an Obligor and any Lender (or any Affiliate of such Lender), but only to the
extent that such agreements are permitted by the terms of the Credit Agreement.
(e) Performance of all Letter of Credit Agreements issued from time to time
under or pursuant to the Credit Agreement and all reimbursement obligations for
drawn or undrawn portions under any Letter of Credit now outstanding or
hereafter issued under or pursuant to the Credit Agreement.
Section 1.04 Pro Rata Benefit. This Mortgage is executed and granted for
the pro rata benefit and security of the Lenders, any Person secured hereby and
any and all future holders of an interest in the Indebtedness and the interest
thereon for so long as same remains unpaid and thereafter for so long as any
Lender or any Person secured hereby (or any Lender Affiliate) has any
obligations under the Credit Agreement to lend money or issue Letters of Credit
in favor of the Mortgagor or has any obligations under any Hedging Agreements
(including those described in Section 1.03(c) and Section 1.03(d)) or until the
Liens hereby created are released by the Mortgagee; it being understood and
agreed that possession of any Note (or any replacements of any said Note) at any
time by the Borrower shall not in any manner extinguish the Indebtedness, such
Notes or this Mortgage securing payment thereof, and the Borrower shall have the
right to issue and reissue any of the Notes from time to time as its interest or
as convenience may
require, without in any manner extinguishing or affecting the Indebtedness, the
obligations under any of the Notes, or the security of this Mortgage.
Section 1.05 Defined Terms. Any capitalized term used in this Mortgage and
not defined in this Mortgage shall have the meaning assigned to such term in the
Credit Agreement.
ARTICLE II
ASSIGNMENT OF PRODUCTION
Section 2.01 Assignment. To further secure the Indebtedness, the Mortgagor
has absolutely and unconditionally granted, assigned, transferred and conveyed,
and does hereby absolutely and unconditionally grant, assign, transfer and
convey unto the Mortgagee, for its benefit and the benefit of the Lenders, any
Person secured hereby and other holders of the Indebtedness, all of the
Hydrocarbons and all products obtained or processed therefrom, and the revenues
and proceeds now and hereafter attributable to the Hydrocarbons and said
products and all payments in lieu of the Hydrocarbons such as "take or pay"
payments or settlements. The Hydrocarbons and products are to be delivered into
pipe lines connected with the Mortgaged Property, or to the purchaser thereof,
to the credit of the Mortgagee, for its benefit and the benefit of the Lenders
and other holders of the Indebtedness, free and clear of all taxes, charges,
costs and expenses; and all such revenues and proceeds shall be paid directly to
the Mortgagee, at its banking quarters in New York, New York, with no duty or
obligation of any party paying the same to inquire into the rights of the
Mortgagee to receive the same, what application is made thereof, or as to any
other matter. The Mortgagor agrees to perform all such acts, and to execute all
such further assignments, transfers and division orders and other instruments as
may be required or desired by the Mortgagee or any party in order to have said
proceeds and revenues so paid to the Mortgagee. The Mortgagee is fully
authorized to receive and receipt for said revenues and proceeds; to endorse and
cash any and all checks and drafts payable to the order of the Mortgagor or the
Mortgagee for the account of the Mortgagor received from or in connection with
said revenues or proceeds and to hold the proceeds thereof in a bank account as
additional collateral securing the Indebtedness; and to execute transfer and
division orders in the name of the Mortgagor, or otherwise, with warranties
binding the Mortgagor. During the continuation of an Event of Default, all
proceeds received by the Mortgagee pursuant to this grant and assignment shall
be at the Mortgagee's sole discretion either remitted to the Mortgagor or
applied as provided in Section 4.14. The Mortgagee shall not be liable for any
delay, neglect or failure to effect collection of any proceeds or to take any
other action in connection therewith or hereunder; but the Mortgagee shall have
the right, at its election, in the name of the Mortgagor or otherwise, to
prosecute and defend any and all actions or legal proceedings deemed advisable
by the Mortgagee in order to collect such funds and to protect the interests of
the Mortgagee and/or the Mortgagor, with all costs, expenses and attorneys' fees
incurred in connection therewith being paid by the Mortgagor. The Mortgagor
hereby appoints the Mortgagee as its attorney-in-fact to pursue any and all
rights of the Mortgagor to liens on and security interests in the Hydrocarbons
securing payment of proceeds of runs attributable to the Hydrocarbons. In
addition to the rights granted to the Mortgagee in Section 1.01(f) of this
Mortgage, the Mortgagor hereby further grants, transfers and assigns to the
Mortgagee any and all such liens, security interests, financing statements or
similar interests of the Mortgagor attributable to its interest in the
Hydrocarbons and proceeds of runs therefrom arising under or created by said
statutory provision, judicial decision or otherwise. The power of attorney
granted to the Mortgagee in this Section 2.01, being coupled with an interest,
shall be irrevocable so long as the Indebtedness or any part thereof remains
unpaid. Until such time as an Event of Default has occurred and is continuing,
the Mortgagee hereby grants to the Mortgagor a license to sell, receive and
receipt for proceeds from the sale of Hydrocarbons, which license shall
automatically terminate upon such Event of Default and for so long as the same
continues.
Section 2.02 No Modification of Payment Obligations. Nothing herein
contained shall modify or otherwise alter the obligation of the Borrower, the
other Obligor or the Mortgagor to make prompt payment of all principal and
interest owing on the Indebtedness when and as the same become due regardless of
whether the proceeds of the Hydrocarbons are sufficient to pay the same, and the
rights provided in accordance with the foregoing assignment provision shall be
cumulative of all other security of any and every character now or hereafter
existing to secure payment of the Indebtedness.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Mortgagor hereby represents, warrants and covenants as follows:
Section 3.01 Title. To the extent of the undivided interests specified for
the xxxxx on attached Exhibit A, the Mortgagor has good and defensible title to
and is possessed of the Mortgaged Property. The Mortgaged Property is free of
any and all Liens except Liens permitted to be placed on the Mortgaged Property
under Section 9.03 of the Credit Agreement (collectively, the "Permitted
Encumbrances").
Section 3.02 Defend Title. This Mortgage is, and always will be kept, a
direct first priority lien and security interest upon the Mortgaged Property
subject only to the Permitted Encumbrances, and the Mortgagor will not create or
suffer to be created or permit to exist any lien, security interest or charge
prior or junior to or on a parity with the lien and security interest of this
Mortgage upon the Mortgaged Property or any part thereof or upon the rents,
issues, revenues, profits and other income therefrom other than the Permitted
Encumbrances. The Mortgagor will warrant and defend the title to the Mortgaged
Property against the claims and demands of all other persons whomsoever and will
maintain and preserve the lien created hereby so long as any of the Indebtedness
secured hereby remains unpaid. Should an adverse claim be made against or a
cloud develop upon the title to any part of the Mortgaged Property other than
Permitted Encumbrances, the Mortgagor agrees it will immediately defend against
such adverse claim or take appropriate action to remove such cloud at the
Mortgagor's cost and expense, and the Mortgagor further agrees that the
Mortgagee may take such other action as they deem advisable to protect and
preserve their interests in the Mortgaged Property, and in such event the
Mortgagor will indemnify the Mortgagee against any and all costs, attorney's
fees and other expenses which they may incur in defending against any such
adverse claim or taking action to remove any such cloud.
Section 3.03 Not a Foreign Person. The Mortgagor is not a "foreign person"
within the meaning of the Code, Sections 1445 and 7701 (i.e. the Mortgagor is
not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or foreign estate as
those terms are defined in the Code and any regulations promulgated thereunder).
Section 3.04 Power to Create Lien and Security. The Mortgagor has full
power and lawful authority to grant, bargain, sell, assign, transfer, mortgage
and convey a security interest in all of the Mortgaged Property in the manner
and form herein provided. No authorization, approval, consent or waiver of any
lessor, sublessor, Governmental Authority or other party or parties whomsoever
is required in connection with the execution and delivery by the Mortgagor of
this Mortgage except to the extent the approval or consent of the Department of
the Interior, United States of America or similar Governmental Authority, as the
case may be, is required by applicable law or regulation to the transfer or
assignment of an interest in any of the Mortgaged Property.
Section 3.05 Revenue and Cost Bearing Interest. The Mortgagor's ownership
of the Hydrocarbon Property and the undivided interests therein as specified for
the xxxxx on attached Exhibit A will, after giving full effect to all Permitted
Encumbrances, afford the Mortgagor not less than those net interests (expressed
as a fraction, percentage or decimal) in the production from or which is
allocated to such xxxxx specified as Net Revenue Interest or NRI on attached
Exhibit A and will cause the Mortgagor to bear not more than that portion
(expressed as a fraction, percentage or decimal), specified as Working Interest
or WI on attached Exhibit A, of the costs of drilling, developing and operating
the xxxxx identified on Exhibit A except to the extent of any proportionate
corresponding increase in the Net Revenue Interest.
Section 3.06 Rentals Paid; Leases in Effect. All rentals and royalties due
and payable in accordance with the terms of any leases or subleases comprising a
part of the Hydrocarbon Property have been duly paid or provided for, and all
leases or subleases comprising a part of the Hydrocarbon Property are in full
force and effect.
Section 3.07 Operation By Third Parties. All or portions of the Mortgaged
Property may be comprised of interests in the Hydrocarbon Property which are
other than working interests or which may be operated by a party or parties
other than the Mortgagor and with respect to all or any such interests and
properties as may be comprised of interests other than working interests or
which may be operated by parties other than the Mortgagor, the Mortgagor's
covenants as expressed in this Article III are modified to require that the
Mortgagor use its reasonable efforts to obtain compliance with such covenants by
the working interest owners or the operator or operators of such leases or
properties.
Section 3.08 Abandon, Sales. The Mortgagor will not sell, lease, assign,
transfer or otherwise dispose or abandon any of the Mortgaged Property except as
permitted by the Credit Agreement.
Section 3.09 Failure to Perform. The Mortgagor agrees that if the Mortgagor
fails to perform any act or to take any action which the Mortgagor is required
to perform or take hereunder or pay any money which the Mortgagor is required to
pay hereunder, Mortgagee, in the Mortgagor's name or its own name, may, but
shall not be obligated to, perform or cause to perform such act or take such
action or pay such money, and any reasonable expenses so incurred by either of
them and any money so paid by either of them shall be a demand obligation
owing by the Mortgagor to the Mortgagee, as the case may be, and Mortgagee, upon
making such payment, shall be subrogated to all of the rights of the Person
receiving such payment. Each amount due and owing by the Mortgagor to the
Mortgagee pursuant to this Mortgage shall bear interest from the date of such
expenditure or payment to such Person until paid at the Post-Default Rate, and
all such amounts together with such interest thereon shall be a part of the
Indebtedness described in Section 1.03 hereof.
ARTICLE IV
RIGHTS AND REMEDIES
Section 4.01 Event of Default. An "Event of Default" under the Credit
Agreement shall be an Event of Default under this Mortgage.
Section 4.02 Foreclosure and Sale. (a) If an Event of Default shall occur
and be continuing, the Mortgagee shall have the right and option to proceed with
foreclosure by proceeding with foreclosure and to sell, to the extent permitted
by law, all or any portion of the Mortgaged Property at one or more sales, as an
entirety or in parcels, at such place or places in otherwise such manner and
upon such notice as may be required by law, or, in the absence of any such
requirement, as the Mortgagee may deem appropriate, and to make conveyance to
the purchaser or purchasers. Where the Mortgaged Property is situated in more
than one jurisdiction, notice as above provided shall be posted and filed in all
such jurisdictions (if such notices are required by law), and all such Mortgaged
Property may be sold in any such jurisdiction and any such notice shall
designate the jurisdiction where such Mortgaged Property is to be sold. The
Mortgagor hereby irrevocably appoints Mortgagee to be the attorney of the
Mortgagor and in the name and on behalf of the Mortgagor to execute and deliver
any assignments, assurances and notices which the Mortgagor ought to execute and
deliver and do and perform any and all such acts and things which the Mortgagor
ought to do and perform under the covenants herein contained and generally, to
use the name of the Mortgagor in the exercise of all or any of the powers hereby
conferred on Mortgagee. Nothing contained in this Section 4.02 shall be
construed so as to limit in any way Mortgagee's rights to sell the Mortgaged
Property, or any portion thereof, by private sale if, and to the extent that,
such private sale is permitted under the laws of the applicable jurisdiction or
by public or private sale after entry of a judgment by any court of competent
jurisdiction so ordering. At any such sale: (i) whether made under the power
herein contained or any other legal enactment, or by virtue of any judicial
proceedings or any other legal right, remedy or recourse, it shall not be
necessary for Mortgagee to have physically present, or to have constructive
possession of, the Mortgaged Property (the Mortgagor hereby covenanting and
agreeing to deliver to Mortgagee any portion of the Mortgaged Property not
actually or constructively possessed by Mortgagee immediately upon demand by
Mortgagee) and the title to and right of possession of any such property shall
pass to the purchaser thereof as completely as if the same had been actually
present and delivered to purchaser at such sale, and (ii) to the extent and
under such circumstances as are permitted by law, the Mortgagee may be a
purchaser at any such sale, and shall have the right, after paying or accounting
for all costs of said sale or sales, to credit the amount of the bid upon the
amount of the Indebtedness (in the order of priority set forth in Section 4.14
hereof) in lieu of cash payment.
(b) If an Event of Default shall occur and be continuing, this Mortgage may
be foreclosed as to the Mortgaged Property, or any part thereof, in any manner
permitted by applicable law. Cumulative of the foregoing and the other
provisions of this Section 4.02, the Mortgagee may foreclose this Mortgage by
executory process subject to, and on the terms and conditions required or
permitted by, applicable law, and shall have the right to appoint a keeper of
the Mortgaged Property.
(c) In the event the Mortgagee elects to dispose of the Mortgaged Property
through more than one sale, the Mortgagor agrees to pay the costs and expenses
of each such sale and of any judicial proceedings wherein the same may be made,
including reasonable compensation to the Mortgagee, its agents and counsel, and
to pay all expenses, liabilities and advances made or incurred by the Mortgagee
with such sale or sales, together with interest on all such advances made by the
Mortgagee at the Post-Default Rate. No such sale shall terminate or otherwise
affect the Lien of this Mortgage on any part of the Mortgaged Property not sold
until all Indebtedness secured hereby has been fully paid.
Section 4.03 Agents of Mortgagee. Mortgagee or its successor may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Mortgagee, including the posting of notices and
the conduct of sale, but in the name and on behalf of Mortgagee, his successor
or substitute.
Section 4.04 Judicial Foreclosure; Receivership. If any of the Indebtedness
shall become due and payable and shall not be promptly paid, Mortgagee shall
have the right and power to proceed by a suit or suits in equity or at law,
whether for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for any
foreclosure hereunder or for the sale of the Mortgaged Property under the
judgment or decree of any court or courts of competent jurisdiction, or for the
appointment of a receiver pending any foreclosure hereunder or the sale of the
Mortgaged Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, or for the enforcement
of any other appropriate legal or equitable remedy. Any money advanced by the
Mortgagee in connection with any such receivership shall be a demand obligation
(which obligation the Mortgagor hereby expressly promises to pay) owing by the
Mortgagor to the Mortgagee and shall bear interest from the date of making such
advance by the Mortgagee until paid at the Post-Default Rate.
Section 4.05 Foreclosure for Installments. The Mortgagee shall also have
the option to proceed with foreclosure in satisfaction of any installments of
the Indebtedness which have not been paid when due either through the courts or
by directing Mortgagee to proceed with foreclosure in satisfaction of the
matured but unpaid portion of the Indebtedness as if under a full foreclosure,
conducting the sale as herein provided and without declaring the entire
principal balance and accrued interest due; such sale may be made subject to the
unmatured portion of the Indebtedness, and any such sale shall not in any manner
affect the unmatured portion of the Indebtedness, but as to such unmatured
portion of the Indebtedness this Mortgage shall remain in full force and effect
just as though no sale had been made hereunder. It is further agreed that
several sales may be made hereunder without exhausting the right of sale for any
unmatured part of the Indebtedness, it being the purpose hereof to provide for a
foreclosure and sale of the
security for any matured portion of the Indebtedness without exhausting the
power to foreclose and sell the Mortgaged Property for any subsequently maturing
portion of the Indebtedness.
Section 4.06 Separate Sales. The Mortgaged Property may be sold in one or
more parcels and in such manner and order as the Mortgagee, in its sole
discretion, may elect, it being expressly understood and agreed that the right
of sale arising out of any Event of Default shall not be exhausted by any one or
more sales.
Section 4.07 Possession of the Mortgaged Property. The Mortgagor agrees to
the full extent that it lawfully may, that, in case one or more of the Events of
Default shall have occurred and shall not have been remedied, then, and in every
such case, Mortgagee shall have the right and power to enter into and upon and
take possession of all or any part of the Mortgaged Property in the possession
of the Mortgagor, its successors or assigns, or its or their agents or servants,
and may exclude the Mortgagor, its successors or assigns, and all persons
claiming under the Mortgagor, and its or their agents or servants wholly or
partly therefrom; and, holding the same, Mortgagee may use, administer, manage,
operate and control the Mortgaged Property and conduct the business thereof to
the same extent as the Mortgagor, its successors or assigns, might at the time
do and may exercise all rights and powers of the Mortgagor, in the name, place
and stead of the Mortgagor, or otherwise as Mortgagee shall deem best. All
reasonable and customary costs, expenses and liabilities of every character
incurred by the Mortgagee in administering, managing, operating, and controlling
the Mortgaged Property shall constitute a demand obligation (which obligation
the Mortgagor hereby expressly promises to pay) owing by the Mortgagor to the
Mortgagee and shall bear interest from the date of expenditure until paid at the
Post-Default Rate, all of which shall constitute a portion of the Indebtedness
and shall be secured by this Mortgage and all other Security Instruments.
Section 4.08 Occupancy After Foreclosure. In the event there is a
foreclosure sale hereunder and at the time of such sale the Mortgagor or the
Mortgagor's heirs, devisees, representatives, successors or assigns or any other
person claiming any interest in the Mortgaged Property by, through or under the
Mortgagor, are occupying or using the Mortgaged Property or any part thereof,
each and all shall immediately become the tenant of the purchaser at such sale,
which tenancy shall be a tenancy from day to day, terminable at the will of
either the landlord or tenant, or at a reasonable rental per day based upon the
value of the property occupied, such rental to be due daily to the purchaser; to
the extent permitted by applicable law, the purchaser at such sale shall,
notwithstanding any language herein apparently to the contrary, have the sole
option to demand immediate possession following the sale or to permit the
occupants to remain as tenants at will. In the event the tenant fails to
surrender possession of said property upon demand, the purchaser shall be
entitled to institute and maintain a summary action for possession of the
Mortgaged Property (such as an action for forcible entry and detainer) in any
court having jurisdiction.
Section 4.09 Remedies Cumulative, Concurrent and Nonexclusive. Every right,
power and remedy herein given to the Mortgagee shall be cumulative and in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing in equity, at law or by statute (including specifically
those granted by the Applicable UCC in effect and applicable to the Mortgaged
Property or any portion thereof) each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and so often and in such order as may be deemed expedient by the Mortgagee,
and the exercise, or the beginning of the exercise, of any such right, power or
remedy shall not be deemed a waiver of the right to exercise, at the same time
or thereafter any other right, power or remedy. No delay or omission by the
Mortgagee in the exercise of any right, power or remedy shall impair any such
right, power or remedy or operate as a waiver thereof or of any other right,
power or remedy then or thereafter existing.
Section 4.10 No Release of Obligations. Neither the Mortgagor, Obligors,
any Guarantor nor any other Person hereafter obligated for payment of all or any
part of the Indebtedness shall be relieved of such obligation by reason of (a)
the failure of Mortgagee to comply with any request of the Mortgagor, Obligors,
or any Guarantor or any other Person so obligated to foreclose the lien of this
Mortgage or to enforce any provision hereunder or under the Credit Agreement;
(b) the release, regardless of consideration, of the Mortgaged Property or any
portion thereof or interest therein or the addition of any other property to the
Mortgaged Property; (c) any agreement or stipulation between any subsequent
owner of the Mortgaged Property and the Mortgagee extending, renewing,
rearranging or in any other way modifying the terms of this Mortgage without
first having obtained the consent of, given notice to or paid any consideration
to the Mortgagor, Obligors, any Guarantor or such other Person, and in such
event the Mortgagor, Obligors, Guarantor and all such other Persons shall
continue to be liable to make payment according to the terms of any such
extension or modification agreement unless expressly released and discharged in
writing by the Mortgagee; or (d) by any other act or occurrence save and except
the complete payment of the Indebtedness and the complete fulfillment of all
obligations hereunder.
Section 4.11 Release of and Resort to Collateral. The Mortgagee may
release, regardless of consideration, any part of the Mortgaged Property
without, as to the remainder, in any way impairing, affecting, subordinating or
releasing the lien or security interest created in or evidenced by this Mortgage
or its stature as a first and prior lien and security interest in and to the
Mortgaged Property, and without in any way releasing or diminishing the
liability of any person or entity liable for the repayment of the Indebtedness.
For payment of the Indebtedness, the Mortgagee may resort to any other security
therefor held by the Mortgagee in such order and manner as the Mortgagee may
elect.
Section 4.12 Waiver of Redemption, Notice and Marshalling of Assets, Etc.
To the fullest extent permitted by law, the Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefits that might accrue to the
Mortgagor by virtue of any present or future moratorium law or other law
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; (b) all notices of
any Event of Default or of the Mortgagee's intention to accelerate maturity of
the Indebtedness or Mortgagee's election to exercise or his actual exercise of
any right, remedy or recourse provided for hereunder or under the Credit
Agreement; and (c) any right to a marshalling of assets or a sale in inverse
order of alienation. If any law referred to in this Mortgage and now in force,
of which the Mortgagor or its successor or successors might take advantage
despite the provisions hereof, shall hereafter be repealed or cease to be in
force, such law shall thereafter be deemed not to constitute any part of the
contract herein contained or to preclude the operation or application of the
provisions hereof; provided, however, that if the laws of any state do not
permit the redemption period to be
waived, the redemption period is specifically reduced to the minimum amount of
time allowable by statute.
Section 4.13 Discontinuance of Proceedings. In case the Mortgagee shall
have proceeded to invoke any right, remedy or recourse permitted hereunder or
under the Credit Agreement and shall thereafter elect to discontinue or abandon
same for any reason, the Mortgagee shall have the unqualified right so to do
and, in such an event, the Mortgagor and the Mortgagee shall be restored to
their former positions with respect to the Indebtedness, this Mortgage, the
Credit Agreement, the Mortgaged Property and otherwise, and the rights,
remedies, recourses and powers of the Mortgagee shall continue as if same had
never been invoked.
Section 4.14 Application of Proceeds. The proceeds of any sale of the
Mortgaged Property or any part thereof and all other monies received by the
Mortgagee in any proceedings for the enforcement hereof or otherwise, whose
application has not elsewhere herein been specifically provided for, shall be
applied:
(a) First, to the payment of all reasonable expenses incurred by the
Mortgagee incident to the enforcement of this Mortgage, the Credit Agreement or
any of the Indebtedness (including, without limiting the generality of the
foregoing, expenses of any entry or taking of possession, of any sale, of
advertisement thereof, and of conveyances, and court costs, compensation of
agents and employees, and legal fees), and to the payment of all other
reasonable charges, expenses, liabilities and advances incurred or made by the
Mortgagee under this Mortgage or in executing any remedy hereunder;
(b) Second, as set forth in Section 10.02 of the Credit Agreement.
Section 4.15 Resignation of Operator. In addition to all rights and
remedies under this Mortgage, at law and in equity, if any Event of Default
shall occur and the Mortgagee shall exercise any remedies under this Mortgage
with respect to any portion of the Mortgaged Property (or the Mortgagor shall
transfer any Mortgaged Property "in lieu of" foreclosure) whereupon the
Mortgagor is divested of its title to the Mortgaged Property, the Mortgagee
shall have the right to request that any operator of any Mortgaged Property
which is either the Mortgagor or any Affiliate of the Mortgagor to resign as
operator under the joint operating agreement applicable thereto, and no later
than 60 days after receipt by the Mortgagor of any such request, the Mortgagor
shall resign (or cause such other party to resign) as operator of such Mortgaged
Property.
Section 4.16 Indemnity. In connection with any action taken by the
Mortgagee, any Person secured hereby and/or any Lender pursuant to this
Mortgage, the Mortgagee and its officers, directors, employees, representatives,
agents, attorneys, accountants and experts ("Indemnified Parties") shall not be
liable for any loss sustained by the Mortgagor resulting from an assertion that
the Mortgagee has received funds from the production of Hydrocarbons claimed by
third persons or any act or omission of any Indemnified Party in administering,
managing, operating or controlling the Mortgaged Property INCLUDING SUCH LOSS
WHICH MAY RESULT FROM THE ORDINARY NEGLIGENCE OR STRICT LIABILITY OF AN
INDEMNIFIED PARTY unless such loss is caused by the willful misconduct or gross
negligence of an Indemnified Party, nor shall the Mortgagee, any Person secured
hereby and/or any Lender be obligated to perform or discharge any obligation,
duty or liability of the Mortgagor. The Mortgagor shall and does hereby agree to
indemnify each Indemnified Party for, and to hold each Indemnified Party
harmless from, any and all liability, loss or damage which may or might be
incurred by any Indemnified Party by reason of this Mortgage or the exercise of
rights or remedies hereunder INCLUDING SUCH LOSS WHICH MAY RESULT FROM THE
ORDINARY NEGLIGENCE OR STRICT LIABILITY OF AN INDEMNIFIED PARTY other than
liability, loss or damage caused by the willful misconduct or gross negligence
of an Indemnified Party; should the Mortgagee, any Person secured hereby and/or
any Lender make any expenditure on account of any such liability, loss or
damage, the amount thereof, including costs, expenses and reasonable attorneys'
fees, shall be a demand obligation (which obligation the Mortgagor hereby
expressly promises to pay) owing by the Mortgagor to the Mortgagee, any Person
secured hereby and/or any Lender and shall bear interest from the date expended
until paid at the Post-Default Rate, shall be a part of the Indebtedness and
shall be secured by this Mortgage and any other Security Instrument. The
Mortgagor hereby assents to, ratifies and confirms any and all actions of the
Mortgagee, any Person secured hereby and/or any Lenders with respect to the
Mortgaged Property taken under and in compliance with the terms of this
Mortgage. THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED
PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT
SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY
REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTY. THE LIABILITIES OF THE MORTGAGOR AS SET FORTH IN THIS SECTION
4.16 SHALL SURVIVE THE TERMINATION OF THIS MORTGAGE.
ARTICLE V
MISCELLANEOUS
Section 5.01 Instrument Construed as Mortgage, Etc. This Mortgage may be
construed as a mortgage, chattel mortgage, conveyance, assignment, security
agreement, pledge, financing statement, hypothecation or contract, or any one or
more of them, in order fully to effectuate the lien hereof and the purposes and
agreements herein set forth.
Section 5.02 Release of Mortgage; Release Upon Partial Payment. If all
Indebtedness secured hereby shall be paid, no Letters of Credit are outstanding,
the Hedging Agreements secured hereby are terminated and the Credit Agreement
and the Aggregate Commitments
thereunder terminated, the Mortgagee shall forthwith cause satisfaction and
discharge of this Mortgage to be entered upon the record at the expense of the
Mortgagor and shall execute and deliver or cause to be executed and delivered
such instruments of satisfaction and release as may be appropriate. Otherwise,
this Mortgage shall remain and continue in full force and effect.
Section 5.03 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of the Mortgagee in order to effectuate
the provisions hereof, and the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
any such provision in any other jurisdiction.
Section 5.04 Successors and Assigns of Parties. The term "Mortgagee" as
used herein shall mean and include JPMorgan Chase Bank and its successors and
assigns acting as Administrative Agent for the benefit of any legal owner,
holder, assignee or pledgee of any of the Indebtedness secured hereby. The terms
used to designate Mortgagee and Mortgagor shall be deemed to include the
respective heirs, legal representatives, successors and assigns of such parties.
Section 5.05 Satisfaction of Prior Encumbrance. To the extent that proceeds
of the Credit Agreement are used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance against the Mortgaged
Property, such proceeds have been advanced by the Mortgagee at the Mortgagor's
request, and the Mortgagee shall be subrogated to any and all rights, security
interests and liens owned by any owner or holder of such outstanding liens,
security interests, charges or encumbrances, irrespective of whether said liens,
security interests, charges or encumbrances are released, and it is expressly
understood that, in consideration of the payment of such other indebtedness by
the Mortgagee, the Mortgagor hereby waives and releases all demands and causes
of action for offsets and payments to, upon and in connection with the said
indebtedness.
Section 5.06 Subrogation of Mortgagee. This Mortgage is made with full
substitution and subrogation of Mortgagee and its successors and assigns in and
to all covenants and warranties by others heretofore given or made in respect of
the Mortgaged Property or any part thereof.
Section 5.07 Nature of Covenants. The covenants and agreements herein
contained shall constitute covenants running with the land and interests covered
or affected hereby and shall be binding upon the heirs, legal representatives,
successors and assigns of the parties hereto.
Section 5.08 Notices. All notices, requests, consents, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed sufficiently given or furnished if delivered by registered or certified
United States mail, postage prepaid, or by personal service (including express
or courier service) at the addresses specified in Section 5.11 (unless changed
by similar notice in writing given by the particular party whose address is to
be changed). Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of delivery at the
address and in the
manner provided herein, upon receipt; provided that, service of notice as
required by the laws of any state in which portions of the Mortgaged Property
may be situated shall for all purposes be deemed appropriate and sufficient with
the giving of such notice.
Section 5.09 Counterparts. This Mortgage is being executed in several
counterparts, all of which are identical, except that to facilitate recordation,
if the Mortgaged Property is situated in more than one county or parish,
descriptions of only those portions of the Mortgaged Property located in the
county or parish in which a particular counterpart is recorded shall be attached
as Exhibit A thereto. An Exhibit A containing a description of all the Mortgaged
Property wheresoever situated will be attached to that certain counterpart to be
attached to a Financing Statement and filed with the Clerk of Court (or, in the
case of Orleans Parish, with the Recorder of Mortgages) of any parish in the
State of Louisiana (for indexing in the Louisiana Uniform Commercial Code
Records. Each of such counterparts shall for all purposes be deemed to be an
original and all such counterparts shall together constitute but one and the
same instrument.
Section 5.10 Governing Law. Insofar as permitted by otherwise applicable
law, this Mortgage shall be construed under and governed by the laws of the
State of Louisiana.
Section 5.11 Financing Statement. This Mortgage shall be effective as a
financing statement filed as a fixture filing with respect to all fixtures
included within the Mortgaged Property. This Mortgage shall also be effective as
a financing statement covering minerals or the like (including oil and gas and
all other substances of value which may be extracted from the ground) and
accounts arising out of the sale of oil, gas and other minerals at the wellhead
or minehead of xxxxx or mines located on the properties subject to the
Applicable UCC. In addition, the Mortgagor shall execute and deliver to the
Mortgagee, upon the Mortgagee's request, any financing statements or amendments
thereof or continuation statements thereto that the Mortgagee may require to
perfect a security interest in said items or types of property. The Mortgagor
shall pay all costs of filing such instruments. In that regard, the following
information is provided:
Name of Mortgagor/Debtor: EEX Operating L.P.
Address of Mortgagor/Debtor 0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Type of Organization limited partnership
State of Organization Texas
chief executive office: 0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
Copy to: __________________
__________________
__________________
Facsimile:______________
Telephone:______________
Organizational
ID Number of Mortgagor/Debtor: 00103219-10
Tax I.D. Number of
Mortgagor/Debtor: 00-0000000
Name of Secured Party: JPMorgan Chase Bank,
as Administrative Agent
Address of Secured Party: Loan and Agency Services
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile:______________
Telephone:______________
Tax I.D. Number of
Secured Party:
________________________
Owner of Record of
Real Property: Mortgagor/Debtor
Collateral: As described in Sections 1.01, 1.02,
2.01, 2.02, EXHIBIT A and this 6.11.
Section 5.12 Exculpation Provisions. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT
IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS
IN FACT READ THIS MORTGAGE AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS MORTGAGE; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE; AND HAS RECEIVED THE
ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS MORTGAGE RESULT IN ONE PARTY ASSUMING THE
LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER
PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS MORTGAGE ON THE BASIS THAT THE
PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
Section 5.13 References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Mortgage refer to this Mortgage
as a whole, and not to any particular article, section or subsection. Any
reference herein to a Section shall be deemed to refer to the applicable Section
of this Mortgage unless otherwise stated herein. Any reference herein to an
exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
ARTICLE VI
SPECIAL LOUISIANA PROVISIONS
Section 6.01 Maximum Amount. Insofar as any portion of the Mortgaged
Property situated in or offshore the State of Louisiana is concerned, or as to
which the laws of the State of Louisiana would be applicable, the maximum amount
of the Indebtedness that may be outstanding at any time and from time to time
that this Mortgage secures is fixed at Five Hundred Million and 00/100 United
States Dollars (US $500,000,000.00).
Section 6.02 Keeper. The Mortgagee shall have the right to appoint a keeper
of the Mortgaged Property pursuant to the terms and provisions of La. R.S.
9:5131 et seq. and 9:5136 et seq.
Section 6.03 Confession of Judgment. For purposes of executory process the
Mortgagor acknowledges the Indebtedness secured hereby, whether now existing or
to arise hereafter, and confesses judgment in favor or the Mortgagee for the
full amount of the Indebtedness. Upon the occurrence of an Event of Default and
any time thereafter so long as the same shall be continuing, and in addition to
all other rights and remedies granted the Mortgagee hereunder, it shall be
lawful for and the Mortgagor hereby authorizes the Mortgagee without making a
demand or putting the Mortgagor in default, a putting in default being expressly
waived, to cause all and singular Mortgaged Property to be seized and sold, the
Mortgagor waiving the benefit of any and all laws or parts of laws relative to
appraisement of the Mortgaged Property seized and sold under executory process
or other legal process, and consenting that the Mortgaged Property be sold
without appraisement, either in its entirety or in lots or parcels, as the
Mortgagee may determine, to the highest bidder for cash or on such other terms
as the plaintiff in such proceedings may direct. The Mortgagee shall be granted
all rights and remedies granted it hereunder as well as all rights and remedies
granted to Agent under Louisiana law including the Uniform Commercial Code then
in effect in Louisiana.
Section 6.04 Waivers. The Mortgagor hereby waives:
(a) The benefit of appraisement provided for in articles 2332, 2336, 2723
and 2724 of the Louisiana Code of Civil Procedure and all other laws conferring
the same;
(b) The demand and three (3) days notice of demand as provided in articles
2639 and 2721 of the Louisiana Code of Civil Procedure;
(c) The notice of seizure provided by articles 2293 and 2721 of the
Louisiana Code of Civil Procedure; and
(d) The three (3) days delay provided for in articles 2331 and 2722 of the
Louisiana Code of Civil Procedure.
Section 6.05 Notary Public. The parties relieve and release the undersigned
notary public of any duty to produce and attach mortgage or conveyance
certificates.
Section 6.06 No Paraph. The Mortgagor acknowledges that no promissory note
or other instrument has been presented to the undersigned Notary Public to be
paraphed for identification herewith.
THUS DONE AND PASSED, this ___ day of _____________, 2002, before the
undersigned Notary Public and witnesses.
WITNESSES TO EEX OPERATING L.P.
SIGNATURE:
By EEX Corporation, its General Partner
_____________________________ By: ________________________________
Name: _______________________ Name:____________________________
Title:___________________________
_____________________________
Name: _______________________
_____________________________
Notary Public
SEAL:
EXHIBIT A
Hydrocarbon Property
EXHIBIT B
Certified Resolutions
