Exhibit 10.8
Security Agreement and
Collateral Assignment of Construction Documents
FOR VALUE RECEIVED, and to secure the performance by EL
DORADO NITROGEN COMPANY, an Oklahoma corporation (HEREINAFTER
REFERRED TO AS "Assignor"), of all of its obligations under that
certain Construction Agency Agreement dated as of June 27, 1997
(as the same may be amended, modified or restated from time to
time, and together with all substitutions therefor and
replacements thereof, the "Agreement") between Assignor and
Boatmen's Trust Company of Texas, not in its individual capacity,
except as otherwise expressly provided herein, but solely as
Owner Trustee (the "Secured Party"), and the other Operative
Agreements, Assignor does hereby collaterally assign and grant a
security interest in and Lien upon, to the Secured Party and its
successors and assigns, all of Assignor's right, title and
interest in and to the following, now or hereafter existing,
(referred to collectively herein as the "Construction Agency
Collateral"):
(i) all engineering, procurement and construction
contracts, purchase orders and other agreements relating to
the designing, engineering, selecting, ordering, installing,
testing and placing into service of the Units, as each such
agreement may heretofore or hereafter be entered into,
supplemented, modified or amended from time to time
(collectively, the "Construction Contracts");
(ii) all plans, specifications and drawings of any
and every kind heretofore or hereafter prepared for use in
connection with the designing, engineering, selecting,
ordering, installing, testing and/or placing into service of
the Units, and any supplements, amendments or modifications
thereto (collectively, the "Plans");
(iii) to the extent assignable and to the extent
permitted under applicable law, all building and other
permits, licenses and government approvals which are
necessary or useful to the commencement and completion of
the designing, engineering, selecting, ordering, installing,
testing and/or placing into service of the Units, or which
otherwise relate thereto, heretofore or hereafter obtained
or applied for by or on behalf of Assignor, and any deposits
made in connection therewith (collectively, the "Permits");
(iv) to the extent assignable, all insurance
policies, guarantees and bonds in favor of Assignor required
pursuant to the Construction Contracts or otherwise, as each
of the same be heretofore or hereafter supplemented,
modified, or amended form time to time and the right to
receive payments and proceeds under such insurance policies,
guarantees and bonds (collectively, the "Insurance
Policies"); and
(v) all proceeds of any of the foregoing;
provided, however, that Secured Party shall have no obligation or
liability of any kind under or with respect to the Construction
Contracts, the Permits, the Plans or the Insurance Policies,
either before or after its exercise of any rights hereby granted
to it, and Assignor agrees to save and hold Secured Party
harmless from, and to indemnify it against, any and all such
obligations and liabilities, contingent or otherwise.
All capitalized but undefined terms used herein shall have
the same respective meanings as in the Construction Agency
Agreement.
This Security Agreement and Collateral Assignment of
Construction Documents shall inure to the benefit of Secured
Party and its successors and assigns, and shall be binding upon
Assignor and its successors and assigns, and shall be binding
upon Assignor and its successors and assigns, and shall continue
in full force and effect until all obligations, liabilities and
indebtedness of any kind now or hereafter due Secured party from
Assignor under or with respect to the Construction Agency
Agreement or any of the other Operative Agreements, or which are
otherwise secured hereby, whether now existing or hereafter
arising or incurred (collectively, the "Liabilities"), have been
fully paid, performed and satisfied, at which time this Security
Agreement and Collateral Assignment of Construction Documents
will terminate. Secured Party will not exercise any of its
rights hereunder until a Construction Agency Event of Default
occurs.
For purposes of completing the designing, engineering,
selecting, ordering, installing, testing and/or placing into
service of the Units after a Construction Agency Event of Default
shall have occurred, Secured Party may, at its option, further
assign its right, title and interest in the Construction Agency
Collateral without the consent of Assignor, any contractor or any
other Person.
This Security Agreement and Collateral Assignment of
Construction Documents is a present security interest and
collateral assignment; provided, however, that Secured Party
shall not have the right to undertake completion of the
designing, engineering, selecting, ordering, installing (or
arranging for the installation of), testing and/or placing into
service of the Units or directly to enforce the provisions of any
Construction Contract until a Construction Agency Event of
Default exists. During the continuance of any such Construction
Agency Event of Default, Secured party may, without affecting any
other right or remedy available to it, exercise its rights under
this Security Agreement and Collateral Assignment of Construction
Documents as provided herein in any manner permitted by law. If
any notice to Assignor is required by law, such notice shall be
deemed commercially reasonable if given at least 10 days prior to
the date of intended action.
Assignor represents and warrants that it has more than one
place of business and that its chief executive office, as such
terms are used in Section 9-103(3) of the Uniform Commercial
Code, is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Assignor represents and warrants that upon the filing of an
appropriate Uniform Commercial Code financing statement with the
Secretary of State of Oklahoma, the Secretary of State of Texas
and in the Real Property Records of ▇▇▇▇▇▇▇▇ County, Texas,
Secured Party will have an enforceable, perfected first priority
security interest of record in the Construction Agency Collateral
(except for (a) insurance proceeds to the extent excluded from
Section 9-306 of the Uniform Commercial Code and (b) permits as
to which (i) perfection of a security interest therein is not
governed by the Uniform Commercial Code or (ii) the assignment
thereof, or the granting of a security interest therein, violates
applicable law) as against all Persons, including Assignor and
its creditors.
Assignor, at its own cost and expense, will cause all
financing statements (including precautionary financing
statements), fixture filings and other documents, to be recorded
or filed at such places and times in such manner, and will take
all such other actions or cause such actions top be taken, as may
be reasonably requested by Secured Party in order to establish,
preserve, protect and perfect the first and prior Lien of Secured
Party to the Construction Agency Collateral.
This Security Agreement and Collateral Assignment of
Construction Documents may be effectively waived, modified,
amended or terminated only by a written instrument executed by
Secured Party. Any waiver by Secured Party shall be effective
only with respect to the specific instance described therein.
Delay or course of conduct shall not constitute a waiver of any
right or remedy of Secured Party.
THIS SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT OF
FACILITY DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, Assignor has caused this Security
Agreement and Collateral Assignment of Construction Documents to
be executed by its duly authorized officer as of this 27th day of
June, 1997.
EL DORADO NITROGEN COMPANY,
as Assignor
By:________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
