Exhibit 10.3
______________________________________________________________________
SECURITY AGREEMENT
BY
CEP-M PURCHASE, LLC
IN FAVOR OF
AMEGY BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
November 19, 2010
______________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE I GENERAL TERMS 1
1.1 Terms Defined Above 1
1.2 Definitions Contained in Credit Agreement 1
1.3 Certain Definitions 1
1.4 Terms Defined in Code 2
ARTICLE II SECURITY INTEREST 2
ARTICLE III REPRESENTATIONS AND WARRANTIES 4
3.1 Ownership and Liens 4
3.2 Status of Accounts 4
3.3 Status of Related Rights 4
3.4 Location 4
3.5 Secured Party's Security Interest 5
ARTICLE IV COVENANTS AND AGREEMENTS 5
ARTICLE V RIGHTS, REMEDIES AND WARRANTIES 6
5.1 With Respect to Collateral 6
5.2 Default Remedies 6
5.3 Right of Set-Off 7
5.4 Proceeds 7
5.5 Secured Party's Duties 7
5.6 Secured Party's Actions 8
5.7 Transfer of Secured Obligations and Collateral 8
5.8 Cumulative Security 8
5.9 Continuing Agreement 8
5.10 Cumulative Rights 9
5.11 Exercise of Rights 9
5.12 Remedy and Waiver 9
5.13 Non-Judicial Remedies 9
ARTICLE VI MISCELLANEOUS 9
6.1 Preservation of Liability 9
6.2 Notices 9
6.3 Governing Law 10
6.4 Amendment and Waiver 10
6.5 Invalidity 10
6.6 Survival of Agreements 10
6.7 Successors and Assigns 10
6.8 Titles of Articles, Sections and Subsections 10
6.9 Counterparts 10
6.10 Benefits of Certain Agreements 10
6.11 Conflict with Certain Agreements 10
SECURITY AGREEMENT
This SECURITY AGREEMENT is made and entered into effective the 19th day of
November, 2010, by CEP-M PURCHASE, LLC, a Delaware limited liability company
("Debtor"), with its principal office in Highland, Utah, and the address for
which for purposes hereof is 00000 Xxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx, Xxxx
00000, Attn: Xxxxx X. Xxxx, in favor of AMEGY BANK NATIONAL ASSOCIATION, a
national banking association ("Amegy"), in its capacity as collateral agent for
the lenders under the Credit Agreement referred to below and for any additional
Secured Creditors, the address for which for purposes hereof is 0000 Xxxx Xxx
Xxxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx 00000, Attn: Energy Lending Dept. (in such
capacity, "Secured Party"), for the benefit of the Secured Creditors.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated effective November 19,
2010 by and among Debtor, the lenders party thereto (the "Lenders") and Amegy,
as agent for the Lenders and any additional Secured Creditors (as amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement"), the Debtor is obligated for the full and prompt payment when due of
the principal of, premium, if any, and interest on the promissory notes and
loans made pursuant to the Credit Agreement; and
WHEREAS, pursuant to the Credit Agreement, and as a condition to the future
obligations of the Lenders to make loans or issue or participate in letters of
credit issued thereunder, Debtor has agreed and is required to execute and
deliver this Security Agreement;
NOW, THEREFORE, (i) in order to comply with the terms and conditions of the
Credit Agreement, (ii) for and in consideration of the premises and the
agreements herein contained and (iii) for other good and valuable consideration,
the receipt and sufficiency of all of which being hereby acknowledged, Debtor
hereby agrees with Secured Party as follows:
ARTICLE I
GENERAL TERMS
1.1 Terms Defined Above. As used in this Security Agreement, each of the
terms defined in the preamble hereto and the above recital paragraphs shall have
the meaning assigned to such term above.
1.2 Definitions Contained in Credit Agreement. Each term used herein
beginning with a capital letter which is not defined herein, if any, shall have
the meaning assigned to such term in the Credit Agreement, unless the context
hereof otherwise requires.
1.3 Certain Definitions. As used in this Security Agreement, each of the
following terms shall have the meaning set forth for such term below, unless the
context otherwise requires:
"Code" shall mean the Uniform Commercial Code as in effect in the State of Texas
or any other relevant jurisdiction from time to time.
"Collateral" shall mean all Property, including, without limitation, cash or
other proceeds, in which Secured Party shall have a security interest pursuant
to Article II of this Security Agreement.
"Gas" shall have the meaning assigned to such term in Article II hereof.
"Related Rights" shall mean all chattel papers, documents and instruments
relating to the Accounts or the General Intangibles and all rights now or
hereafter existing in and to all security agreements, leases, and other
contracts securing or otherwise relating to any Accounts or General Intangibles
or any such chattel papers, documents or instruments.
"Secured Obligations" shall mean, collectively, the following:
(a) all Obligations from time to time owing;
(b) all obligations of Debtor under Commodity Hedge Agreements or Interest
Rate Hedge Agreements with Secured Third Party Hedge Counterparties from time to
time owing; and
(c) all other present and future obligations of Debtor arising under any of
the Loan Documents, including, without limitation, in the case of clause (a),
clause (b) and this clause (c), reasonable attorneys fees and expenses and any
interest, fees or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding.
"Security Agreement" shall mean this Security Agreement, as the same may from
time to time be amended, supplemented, restated or otherwise modified.
1.4 Terms Defined in Code. If not defined in the Credit Agreement or
herein, all terms used herein which are defined in the Code shall have the same
meaning herein, unless the context otherwise requires; provided, however, that,
except for such terms when used in Article II, such terms referring to a type of
collateral refer to items of such type of collateral that are included in the
Collateral.
ARTICLE II
SECURITY INTEREST
To secure the Secured Obligations, Debtor hereby grants to Secured Party, for
the benefit of the Secured Creditors, a continuing security interest in, a
general lien upon, and a right of set-off against, the following described
Property of Debtor:
(a) all now existing and hereafter acquired or arising Accounts, Goods,
General Intangibles, Payment Intangibles, Deposit Accounts, Securities Accounts,
Chattel Paper (including, without limitation, Electronic Chattel Paper),
Documents, Instruments, Software, Investment Property, letters of credit, Letter
of Credit Rights, advices of credit, money, As-Extracted Collateral (including
As
Extracted Collateral from the Debtor's present and future operations, regardless
of whether such mineral or gas interests are presently owned or hereafter
acquired by Debtors), Commercial Tort Claims (as listed on a schedule attached
hereto), Equipment, Inventory, Fixtures and Supporting Obligations, together
with all products of and Accessions to any of the foregoing and all Proceeds of
any of the foregoing (including, without limitation, all insurance policies and
proceeds thereof);
(b) to the extent, if any, not included in clause (a) above, Debtor's
present and future contracts, agreements, arrangements or understandings (i) for
the sale, supply, provision or disposition of any natural gas, casinghead gas,
all other hydrocarbons not defined as oil, carbon dioxide, and helium or other
substances of a gaseous nature ("Gas"), oil or other minerals by Debtor or any
one or more of its agents, representatives, successors or assigns to any
purchaser or acquirer thereof, and all products, replacements and proceeds
thereof (including, without limitation, all Gas or oil sales contracts) and (ii)
relating to the mining, drilling or recovery of any mineral, crude oil or gas
reserves for the benefit of or on behalf of Debtor or any of its agents,
representatives, successors or assigns (including, without limitation, all
contract mining, drilling or recovery agreements and arrangements), and all
products and Proceeds thereof and payments thereunder, together with all
products and Proceeds (including, without limitation, all insurance policies and
proceeds) of and any Accessions to any of the foregoing;
(c) to the extent, if any, not included in clause (a) above, all Gas, oil
and other minerals severed or extracted from the ground (specifically including
all "As-Extracted Collateral" of such Debtor and all severed or extracted Gas
purchased, acquired or obtained from other parties), and all Accounts, General
Intangibles and products and Proceeds thereof or related thereto, regardless of
whether any such Gas, oil or other minerals are in raw form or processed for
sale and regardless of whether or not Debtor had an interest in the Gas, oil or
other minerals before extraction or severance;
(d) to the extent, if any, not included above, each and every other item of
personal property and fixtures, whether now existing or hereafter arising or
acquired, including, without limitation, all licenses, contracts and agreements
(including, without limitation, Commodity Hedge Agreements and Interest Rate
Hedge Agreements), and all collateral for the payment or performance of any
contract or agreement, together with all products and Proceeds (including all
insurance policies and proceeds) and any Accessions to any of the foregoing;
(e) all present and future business records and information, including,
without limitation, computer tapes and other storage media containing the same
and computer programs and software (including, without limitation, source code,
object code and related manuals and documentation and all licenses to use such
software) for accessing and manipulating such information; and
(f) any additional property of Debtor from time to time delivered to or
deposited with Secured Party as security for the Secured Obligations or
otherwise pursuant to the terms of this Security Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party and the Secured Creditors to accept this
Security Agreement, Debtor represents and warrants to Secured Party (which
representations and warranties will survive the creation of the Secured
Obligations and any other extension of credit under the Credit Agreement) that:
3.1 Ownership and Liens. Except for the security interest of Secured Party
granted in this Security Agreement and other Permitted Liens, Debtor owns good
and marketable title to the Collateral free and clear of any other Liens.
Debtor has full right, power and authority to grant to Secured Party a security
interest in the Collateral provided by Debtor in the manner provided herein,
free and clear of any other Liens, adverse claims and options other than
Permitted Liens. No other Lien created by Debtor or is known by Debtor to exist
with respect to any Collateral; and to the best of such Debtor's information and
belief, no financing statement or other security instrument is on file in any
jurisdiction covering such Collateral, other than those in favor of Secured
Party and other Permitted Liens. At the time the security interest in favor of
Secured Party attaches, good and marketable title to all after-acquired Property
included within the Collateral provided by Debtor, free and clear of any other
Liens, other than Permitted Liens, will be vested in Debtor.
3.2 Status of Accounts. Each Account of Debtor now existing represents, and
each Account of Debtor hereafter arising will represent, the valid and legally
enforceable indebtedness of a bona fide account debtor arising from the sale or
lease or rendition by Debtor of goods and/or services and is not and will not be
subject to contra accounts, set-offs, defenses or counterclaims by or available
to account debtors obligated on the Accounts of Debtor except as disclosed to
Secured Party in writing or where any such contra account, set-off, defense or
counterclaim could not reasonably be expected to result in a Material Adverse
Effect; such goods will have been delivered to, or be in the process of being
delivered to, and such services will have been rendered by Debtor to the account
debtor and accepted by the account debtor; and the amount shown as to each
Account of Debtor on Debtor's books will be the true and undisputed amount owing
and unpaid thereon, subject to any discounts, allowances, rebates, credits and
adjustments to which the account debtor has a right and which have been
disclosed to Secured Party in writing or which could not reasonable result in a
Material Adverse Effect.
3.3 Status of Related Rights. All Related Rights of Debtor are, and those
hereafter arising will be, valid and genuine.
3.4 Location. Debtor's chief executive office and chief place of business
is located at the address set forth in the opening paragraph of this Security
Agreement. The office where Debtor keeps its records concerning the Accounts of
Debtor and the General Intangibles of Debtor and the original of all the Related
Rights of Debtor has the same address as Debtor's chief executive office and
chief place of business. No Equipment and/or Inventory is covered by a
certificate of title (other than certain motor vehicles and aircraft) pursuant
to applicable law. The jurisdiction of organization for Debtor is the State of
Delaware.
3.5 Secured Party's Security Interest. This Security Agreement creates a
valid and binding security interest in the Collateral provided by Debtor
securing the Secured Obligations.
All filings (which filings with Governmental Authorities are described in
Article IV of this Security Agreement) and other actions necessary to perfect or
protect such security interest have been duly or will be promptly taken by
Debtor. No further or subsequent filing, recording, registration or other
public notice of such security interest is necessary in any governmental office
or jurisdiction in order to perfect such security interest or to continue,
preserve or protect such security interest except for continuation statements or
for filings upon the occurrence of any of the events stated in Section 4.10 of
this Security Agreement. Such perfected security interest in the Collateral
constitutes a first-priority (except as to Permitted Liens) security interest
under the Code.
ARTICLE IV
COVENANTS AND AGREEMENTS
A deviation from the provisions of this Article IV shall not constitute a
default under this Security Agreement if such deviation is consented to in
writing by Secured Party. Without the prior written consent of Secured Party,
Debtor will at all times comply with the covenants contained in this Article IV,
from the date hereof and for so long as any part of the Secured Obligations is
outstanding.
Debtor recognizes that one or more financing statements pertaining to the
Collateral provided by Debtor will be filed in one or more filing offices.
Debtor will promptly notify Secured Party of any condition or event that may
change the proper location for the filing of any financing statements or other
public notice or recordings for the purpose of perfecting a security interest in
the Collateral. Without limiting the generality of the foregoing, Debtor will
(a) promptly notify Secured Party of any change (i) in the location of the
office where such Debtor keeps its records concerning its Accounts or (ii) in
the "location" of such Debtor within the meaning set forth in the Code or the
jurisdiction in which Debtor is incorporated, organized or formed; (b) prior to
any of the Collateral provided by Debtor becoming so related to any particular
real estate so as to become a fixture on such real estate, notify Secured Party
of the description of such real estate and the name of the record owner thereof,
to the extent such real estate is not already encumbered in favor or for the
benefit of Secured Party to secure the Secured Obligations; and (c) promptly
notify Secured Party of any change in Debtor's name, identity or structure. In
any notice furnished pursuant to this paragraph, Debtor will expressly state
that the notice is required by this Security Agreement and contains facts that
will or may require additional filings of financing statements or other notices
for the purpose of continuing perfection of Secured Party's security interest in
the Collateral. Further, Debtor authorizes Secured Party to file, at the
expense of such Debtor, any and all financing statements, pursuant to Article 9
of the Code, as Secured Party deems necessary, in its sole discretion, in
conjunction with this Security Agreement.
ARTICLE V
RIGHTS, REMEDIES AND WARRANTIES
5.1 With Respect to Collateral. If an Event of Default has occurred and is
continuing, Secured Party is hereby fully authorized and empowered (without the
necessity of any further consent or authorization from Debtor) and the right is
expressly granted to Secured Party, and Debtor hereby constitutes, appoints and
makes Secured Party, as its true and lawful attorney-in
fact and agent for it and in its name, place and stead, with full power of
substitution, in Secured Party's name or Debtor's name or otherwise, for the
sole use and benefit of Secured Party and the other Secured Creditors, but at
Debtor's cost and expense, to exercise, without notice, all or any of the
following powers at any time with respect to all or any of the Collateral:
(a) to notify account debtors or the obligors on the Accounts, the General
Intangibles and the Related Rights to make and deliver payment to Secured Party;
(b) to demand, xxx for, collect, receive and give acquittance for any and
all monies due or to become due by virtue thereof and otherwise deal with
proceeds;
(c) to receive, take, endorse, assign and deliver any and all checks, notes,
drafts, Documents and other negotiable and non-negotiable Instruments and
Chattel Paper taken or received by Secured Party in connection therewith;
(d) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
(e) to sell, transfer, assign or otherwise deal in or with the same or the
Proceeds or avails thereof or the relative goods, as fully and effectively as if
Secured Party were the absolute owner thereof; and
(f) to extend the time of payment of any or all thereof and to grant waivers
and make any allowance or other adjustment with reference thereto;
provided, however, Secured Party shall be under no obligation or duty to
exercise any of the powers hereby conferred upon it and shall be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any Collateral.
5.2 Default Remedies. Upon the occurrence and the continuance of any Event
of Default, Secured Party may then, or at any time thereafter and from time to
time, apply, set-off, collect, sell in one or more sales, lease, or otherwise
dispose of, any or all of the Collateral, in its then condition or following any
commercially reasonable preparation or processing, in such order as Secured
Party may elect, and any such sale may be made either at public or private sale
at its place of business or elsewhere, or at any brokers' board or securities
exchange, either for cash or upon credit or for future delivery, at such price
as Secured Party may deem fair, and Secured Party may be the purchaser of any or
all Collateral so sold and may hold the same thereafter in its own right free
from any claim of Debtor or right of redemption. No such purchase or holding by
Secured Party shall be deemed a retention by Secured Party in satisfaction of
the Secured Obligations. All demands, notices and advertisements and the
presentment of Property at sale are hereby waived. If, notwithstanding the
foregoing provisions, any applicable provision of the Code or other law requires
Secured Party to give reasonable notice of any such sale or disposition or other
action, Debtor hereby agrees that twenty days' prior written notice shall
constitute reasonable notice. Secured Party may require Debtor to assemble the
Collateral and make it available to Secured Party at a place designated by
Secured Party which is reasonably convenient to Secured Party and Debtor. Any
sale hereunder may be conducted by an auctioneer or any officer or agent of
Secured Party.
5.3 Right of Set-Off. Upon the occurrence and the continuance of any Event
of Default, Secured Party is hereby authorized to then, or at any time
thereafter and from time to time, without notice to Debtor (any such notice
being expressly waived by Debtor), apply and set-off against the Secured
Obligations (i) any and all deposits (general or special, time or demand,
provisional or final) of Debtor at any time held by Secured Party; (ii) any and
all other claims of any of Debtors against Secured Party, now or hereafter
existing, (iii) any and all other indebtedness at any time owing by Secured
Party to or for the account of Debtor; (iv) any and all money, Instruments,
securities, Documents, Chattel Paper, credits, claims, demands and other
Property, rights or interests of Debtor which at any time shall come into the
possession or custody or under the control of Secured Party, for any purpose;
and (v) the Proceeds of any of the foregoing Property, in accordance with the
Credit Agreement and any applicable intercreditor agreement with any Secured
Creditor, as if the same were included in the Collateral, and Debtor hereby
grants to Secured Party a security interest in, a general lien upon and a right
of set-off against the foregoing described Property as security for the Secured
Obligations. Secured Party shall have the right to so set-off and apply such
Property against the Secured Obligations regardless of whether or not Secured
Party or any other Secured Creditor shall have made any demand for payment of
any of the Secured Obligations or shall have given any other notice. Secured
Party agrees to promptly notify Debtor after any such set-off and application;
provided, however, the failure of Secured Party to give any such notice shall
not affect the validity of such set-off and application. The rights of Secured
Party under this Section 5.3 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which Secured Party may
have.
5.4 Proceeds. After the occurrence and the continuance of any Event of
Default, the proceeds of any sale or other disposition of the Collateral and all
sums received or collected by Secured Party from or on account of the Collateral
shall be applied by Secured Party in the manner set forth in the Credit
Agreement and any applicable intercreditor agreement with any Secured Creditor.
5.5 Secured Party's Duties. The powers conferred upon Secured Party by this
Security Agreement are solely to protect its interest in the Collateral and
shall not impose any duty upon Secured Party to exercise any such powers.
Secured Party shall be under no duty whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of protest,
notice of dishonor or other notice or demand in connection with any Collateral
or the Secured Obligations, or to take any steps necessary to preserve any
rights against prior parties. Secured Party shall not be liable for failure to
collect or realize upon any or all of the Secured Obligations or Collateral, or
for any delay in so doing, nor shall Secured Party be under any duty to take any
action whatsoever with regard thereto. Secured Party shall use reasonable care
in the custody and preservation of any Collateral in its possession, but need
not take any steps to keep the Collateral identifiable. Secured Party shall
have no duty to comply with any recording, filing or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of,
or Secured Party's rights in or to, any of the Collateral.
5.6 Secured Party's Actions. To the extent permitted by applicable law,
Debtor waives any right to require Secured Party to proceed against any Person,
exhaust any Collateral or pursue any other remedy in Secured Party's power, and
Debtor waives any and all notice of acceptance of this Security Agreement or of
creation, modification, rearrangement, renewal or
extension for any period of any of the Secured Obligations from time to time.
All dealings between Debtor and Secured Party, whether or not resulting in the
creation of the Secured Obligations, shall conclusively be presumed to have been
had or consummated in reliance upon this Security Agreement. Until all the
Secured Obligations shall have been indefeasibly paid in full and the
commitments of the Lenders terminated, Debtor shall not have any right to
subrogation, and Debtor waives any benefit of and any right to participate in
any Collateral or security whatsoever now or hereafter held by Secured Party.
Debtor authorizes Secured Party, without notice or demand and without any
reservation of rights against Debtor and without affecting Debtor's liability
hereunder or on the Secured Obligations, from time to time to (a) take and hold
any other Property as collateral, other than the Collateral, as security for any
or all of the Secured Obligations and exchange, enforce, waive and release any
or all of the Collateral or such other Property to the Secured Obligations; and
(b) apply the Collateral or such other Property and direct the order or manner
of sale thereof as Secured Party in its discretion may determine, subject,
however, to the provisions of the Credit Agreement and any applicable
intercreditor agreement with any Secured Creditor.
5.7 Transfer of Secured Obligations and Collateral. Any of the Secured
Obligations may be transferred, in whole or in part, in accordance with the
provisions of the Loan Documents, and, upon any such transfer, Secured Party may
transfer any or all of the Collateral and shall be fully discharged thereafter
from all liability with respect to the Collateral so transferred, and the
transferee shall be vested with all rights, powers and remedies of Secured Party
hereunder with respect to Collateral so transferred; but with respect to any
Collateral not so transferred, Secured Party shall retain all rights, powers and
remedies hereby given. Secured Party may at any time deliver any or all of the
Collateral to Debtor, whose receipt shall be a complete and full acquittance for
the Collateral so delivered, and Secured Party shall thereafter be discharged
from any liability therefor.
5.8 Cumulative Security. The execution and delivery of this Security
Agreement in no manner shall impair or affect any other security (by endorsement
or otherwise) for the Secured Obligations. No security taken hereafter as
security for the Secured Obligations shall impair in any manner or affect this
Security Agreement. All such present and future additional security is to be
considered as cumulative security.
5.9 Continuing Agreement. This is a continuing Security Agreement and the
grant of a security interest hereunder shall remain in full force and effect and
all the rights, powers and remedies of Secured Party hereunder shall continue to
exist until the Secured Obligations are paid in full as the same become due and
payable; until neither Secured Party nor any Secured Creditor has any further
obligation to advance monies or otherwise extend credit to any Debtor under any
of the Loan Documents or otherwise, until Debtor is entitled to obtain the
release hereof pursuant to the Credit Agreement and until Secured Party, upon
request of Debtor, has executed a written termination statement, reassigned to
Debtor, without recourse, the Collateral and all rights conveyed hereby and
returned possession of the Collateral in its possession to Debtor.
5.10 Cumulative Rights. The rights, powers and remedies of Secured Party
hereunder shall be in addition to all rights, powers and remedies given by
statute or rule of law and are cumulative. The exercise of any one or more of
the rights, powers and remedies provided herein shall not be construed as a
waiver of any other rights, powers and remedies of Secured Party. Furthermore,
regardless of whether or not the Code is in effect in the jurisdiction where
such
rights, powers and remedies are asserted, Secured Party shall have the rights,
powers and remedies of a secured party under the Code. Secured Party may
exercise its bankers' lien or right of set-off with respect to the Secured
Obligations in the same manner as if the Secured Obligations were unsecured.
5.11 Exercise of Rights. Time shall be of the essence for the performance
by Debtor of any act under this Security Agreement or in respect of the Secured
Obligations, but neither Secured Party's acceptance of partial or delinquent
payments nor any forbearance, failure or delay by Secured Party in exercising
any right, power or remedy shall be deemed a waiver of any obligation of Debtor
or of any right, power or remedy of Secured Party or preclude any other or
further exercise thereof; and no single or partial exercise of any right, power
or remedy shall preclude any other or further exercise thereof, or the exercise
of any other right, power or remedy.
5.12 Remedy and Waiver. Secured Party may remedy any Default and may waive
any Default without waiving the Default remedied or waiving any prior or
subsequent Default.
5.13 Non-Judicial Remedies. Secured Party may enforce its rights hereunder
without prior judicial process or judicial hearing, and Debtor expressly waives,
renounces and knowingly relinquishes any and all legal rights which might
otherwise require Secured Party to enforce its rights by judicial process. In
so providing for non-judicial remedies, Debtor recognizes and concedes that such
remedies are consistent with the usage of the trade, are responsive to
commercial necessity and are the result of bargain at arm's length. Nothing
herein is intended to prevent Secured Party from resorting to judicial process
at its option.
ARTICLE VI
MISCELLANEOUS
6.1 Preservation of Liability. Neither this Security Agreement nor the
exercise by Secured Party of (or the failure to so exercise) any right, power or
remedy conferred herein or by law shall be construed as relieving any Person
liable on the Secured Obligations from liability on the Secured Obligations and
for any deficiency thereon.
6.2 Notices. Any notice or demand under this Security Agreement or in
connection with this Security Agreement may be given as provided in the Credit
Agreement, but actual notice, however given or received, shall always be
effective.
6.3 Governing Law. THIS SECURITY AGREEMENT AND THE SECURITY INTEREST
GRANTED HEREBY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT
GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
6.4 Amendment and Waiver. This Security Agreement may not be amended (nor
may any of its terms be waived) except in the manner provided in the Credit
Agreement.
6.5 Invalidity. In case any provision of this Security Agreement is
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 Survival of Agreements. All covenants and agreements of Debtor herein
not fully performed before the effective date of this Security Agreement shall
survive such date.
6.7 Successors and Assigns. All representations and warranties of Debtor
herein, and the covenants and agreements herein contained by or on behalf of
Debtor, shall bind Debtor and Debtor's legal representatives, successors and
assigns and shall inure to the benefit of Secured Party, its successors and
assigns.
6.8 Titles of Articles, Sections and Subsections. All titles or headings to
articles, sections, subsections or other divisions of this Security Agreement
are only for the convenience of the parties and shall not be construed to have
any effect or meaning with respect to the other content of such articles,
sections, subsections or other divisions, such other content being controlling
as to the agreement between the parties hereto.
6.9 Counterparts. This Security Agreement may be executed by one or more of
the parties hereto in any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument and shall be enforceable as of the date hereof upon the execution of
one or more counterparts hereof by each of the parties hereto. In this regard,
each of the parties hereto acknowledges that a counterpart of this Security
Agreement containing a set of counterpart execution pages reflecting the
execution of each party hereto shall be sufficient to reflect the execution of
this Security Agreement by each party hereto and shall constitute one
instrument.
6.10 Benefits of Certain Agreements. In connection with its execution and
acting hereunder, Secured Party is entitled to all rights, privileges,
protections, immunities, benefits and indemnities provided to it as agent under
the Credit Agreement.
6.11 Conflict with Certain Agreements. In the event of a conflict between
any provision of this Security Agreement and a provision that is in the Credit
Agreement, the provision of the Credit Agreement shall control; provided,
however, the inclusion in this Security Agreement of a provision with respect to
which there is no corresponding provision in the Credit Agreement shall not
constitute a conflict with any provision of the Credit Agreement.
(SIGNATURES APPEAR ON FOLLOWING PAGES)
IN WITNESS HEREOF, Debtor and Secured Party have caused this Security Agreement
to be duly executed as of the date first above written.
DEBTOR:
CEP-M PURCHASE, LLC
By: Current Energy Partners Corporation,
its Manager
By: \s\ Xxxxxx X. Xxxx
Xxxxx X. Xxxx
Chief Executive Officer
(SIGNATURES CONTINUE ON FOLLOWING PAGE)
SECURED PARTY:
AMEGY BANK NATIONAL ASSOCIATION,
as Collateral Agent
By: \s\ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Senior Vice President
