Exhibit 10.4
SECURITY AGREEMENT
This Security Agreement is made this 1st day of January, 2009, by
BLACKWATER MIDSTREAM CORP. (hereinafter referred to as "Grantor") in favor of NO
LOGO AIR, INC. ("Secured Party"). Grantor's organizational identification number
is C7459-2004. Grantor's principal residence or chief executive office is
located at 000 XxXxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000.
To secure payment of all obligations and liabilities of Grantor to
Secured Party, direct or contingent, due or to become due, now existing or
hereafter arising, including, without limitation, all future advances, with
interest, attorneys' fees, expenses of collection and costs, and further
including, without limitation, obligations to Secured Party on promissory notes,
checks, loan agreements, security documents, endorsements, continuing guaranties
and this Security Agreement (collectively, the "Obligations"), Grantor pledges,
pawns and delivers to Secured Party, and grants to Secured Party a continuing
security interest in, and a right of set-off and compensation against the
following described property:
I. Grantor's right, title and interest (the "LLC Interest") in that
certain limited liability company (the "LLC") known as BLACKWATER NEW
ORLEANS, L.L.C., created by Articles of Organization dated September 9,
2008, and filed on September 9, 2008, in the Office of the Secretary of
State of the State of Louisiana, including, but not necessarily limited
to, all distributions, rents, fruits, profits, revenues, and other
interests, however produced or derived from Grantor's LLC Interest
whether in the event of the sale, lease, improvement, operation, and/or
disposal of any and all property which the LLC presently owns, or
otherwise;
together with all property added to or substituted for any of the foregoing, and
all interest, dividends, income, fruits, returns, accessions, profits, corporate
distributions (including, without limitation, stock splits and stock dividends),
products and proceeds of any of the foregoing (collectively, "Collateral"). The
term "proceeds" shall have the meaning provided in the Louisiana Commercial
Laws, LSA-R.S. ss.10:1-101, ET. SEQ.
Grantor warrants with respect to the Collateral that, except as
otherwise specifically provided herein (a) Grantor is the owner of 100% of the
membership interests in the LLC; (b) the Collateral is not subject to any prior
assignment, claim, lien or security interest; and (c) Grantor will not make any
assignment of the Collateral or create any further security therein, nor permit
Grantor's right in the Collateral to be reached by attachment, levy, garnishment
or other judicial process, without first negotiating with Secured Party, in good
faith, to provide Secured Party with a first priority security interest on
membership interests in the LLC with an appraised value of 150% of the
then-outstanding principal amount of the Obligations.
Secured Party hereby acknowledges that, contemporaneously herewith,
Grantor has granted security interests in the Collateral to Ter Mast Beheer
Utrecht BV and to Xxxxx Xxxxx, and that for all times that Secured Party, Ter
Mast Beheer Utrecht BV and Xxxxx Xxxxx, or any two of them or their
successors-in-interest, continue to hold a security interest in the Collateral,
the ranking of their respective security interests shall be governed by the
terms of an Intercreditor Agreement entered into on even date herewith.
All Collateral shall remain subject to this Security Agreement until
all of the Obligations have been paid and the Collateral has been returned by
Secured Party to the possession of Grantor. Secured Party may renew any and all
renewable items included in the Collateral. All interest, dividends, income,
fruits, returns, accessions, profits, corporate distributions (including,
without limitation, stock splits and stock dividends), and proceeds with respect
to the Collateral shall be delivered by Grantor upon receipt to Secured Party in
negotiable form, as applicable. Grantor shall execute any endorsements,
assignments and financing statements with respect to the Collateral, in form and
substance satisfactory to Secured Party, that Secured Party may request. Grantor
represents and warrants that, except as specifically provided herein, (a)
Secured Party shall at all times have a perfected first priority security
interest in the Collateral free of all other security interests, liens and
claims, and (b) the description and identification of the Collateral and
Grantor's name, organizational identification number, and principal residence or
chief executive office are correctly stated herein. Grantor shall prevent the
accrual of prescription or statute of limitations with respect to the Collateral
no later than sixty (60) days prior to the date on which enforcement would be
barred, and shall execute any additional documents reasonably required to
perfect the security interest of Secured Party in the Collateral. Secured Party
is not obligated to take any of the foregoing actions or to preserve Grantor's
rights with respect to the Collateral including, without limitation, rights
against prior parties and shall not be liable in any manner with respect to the
Collateral. Any responsibility of Secured Party with respect to the Collateral,
whether arising contractually or as a matter of law, is hereby expressly waived.
If Grantor defaults in the timely payment or performance of any of the
Obligations, or if any warranty or representation of Grantor to Secured Party
should be untrue at any time, then, at the option of Secured Party, the
Obligations shall be immediately due and payable in full without notice or
demand, and Secured Party may sell, assign, transfer and effectively deliver all
or any part of the Collateral at public or private sale, without recourse to
judicial proceedings and without demand, appraisement or advertisement, all of
which are hereby expressly waived by Grantor to the fullest extent permitted by
law. For purposes of executory process, Grantor acknowledges the indebtedness
owed under the Obligations, confesses judgment in favor of Secured Party for the
full amount of the Obligations, and agrees to enforcement by executory process.
Grantor waives (a) the benefit of appraisal provided in Art. 2723 of the
Louisiana Code of Civil Procedure and (b) the demand and three (3) days delay
provided by Articles 2639 and 2721, Louisiana Code of Civil Procedure. Grantor
grants to Secured Party an irrevocable mandate and power of attorney (coupled
with an interest) to exercise, before or after default by Grantor of any of the
Obligations, at Secured Party's sole discretionary option and without any
obligation to do so, all rights that Grantor has with respect to the Collateral,
including, without limitation, the right to exercise all rights of inspection,
deriving from Grantor's ownership of or other interest in the Collateral. If the
proceeds from the sale or enforcement of the Collateral are insufficient to
satisfy all of the Obligations in full, all parties obligated thereon shall
remain fully obligated for any deficiency. The rights and remedies of Secured
Party hereunder are cumulative, may be exercised singly or concurrently, and are
in addition to any rights and remedies of Secured Party under applicable law.
Without releasing or affecting any of its rights, Secured Party may,
one or more times, in his sole discretion, without notice to or the consent of
Grantor, take any one or more of the following actions: (a) release, renew or
modify the obligations of Grantor or any other party; (b) release, exchange,
modify, or surrender in whole or in part Secured Party's rights with respect to
any Collateral for the Obligations; (c) modify or alter the term, interest rate
or due date of any payment of any of the Obligations; (d) grant any
postponements, compromises, indulgences, waivers, surrenders or discharges or
modify the terms of its agreements with Grantor; (e) change his manner of doing
business with Grantor or any other party; or (f) impute payments or proceeds of
any Collateral furnished for any of the Obligations, in whole or in part, to any
of the Obligations, or retain the payments or proceeds as Collateral for the
Obligations without applying same toward payment of the Obligations, and Grantor
hereby expressly waives any defenses arising from any such actions. The
obligations of Grantor hereunder shall bind and obligate Grantor's successors
and assigns. Secured Party may assign and transfer the Collateral to an assignee
of any of the Obligations, whereupon such transferee shall become vested with
all powers and rights granted to Secured Party under this Security Agreement. If
any provision of this Security Agreement shall be held to be legally invalid or
unenforceable by any court of competent jurisdiction, all remaining provisions
of this Security Agreement shall remain in full force and effect. This Security
Agreement shall be governed by the internal laws of the State of Louisiana.
GRANTOR:
BLACKWATER MIDSTREAM CORP.
Dated: January 20, 2009 By: /s/ Xxxxxxx X. Xxxxx
---------------- ---------------------------
Xxxxxxx X. Xxxxx, President
SECURED PARTY:
NO LOGO AIR, INC.
By: /s/ Mathijs van Houweninge
-----------------------------------
Print Name: Mathijs van Houweninge
Title:
