EXHIBIT 10.24
FIRST AMENDED SECURITY AGREEMENT
DATE: April 2002, amended July 29, 2003
DEBTOR: Continental Southern Resources, Inc. f/k/a Expressions Graphics, Inc.
DEBTOR'S MAILING ADDRESS: 000 Xxxxxxxxxxxx Xxxx., Xxxxx 000 Xxxx Xxxxxx,
XX 00000
SECURED PARTY: Trident Growth Fund, L.P. f/k/a Gemini Growth Fund, L.P.
SECURED PARTY'S MAILING ADDRESS: 000 Xxxxxx, Xxxxxxx, XX 00000
CLASSIFICATION OF COLLATERAL: Accounts, contract rights, property, equipment,
inventory, general intangibles, instruments, deposit accounts, chattel paper,
leases, mineral right and all other assets.
COLLATERAL (INCLUDING ALL ACCESSIONS): Accounts, contract rights, property,
equipment, inventory, general intangibles, instruments, deposit accounts,
chattel paper, leases, mineral rights and all other assets.
a) All attachments, accessions accessories, tools, parts supplies,
increases, and additions to and all replacements of and substitutions
for any property described above.
b) All products and produce of any of the property described in this
Collateral section.
c) All accounts, contracts rights, general intangibles, intellectual
property, instruments, rents, monies, payments, and all other rights,
arising out of a sale, lease, or other disposition of any of the
property described in this Collateral section.
d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other deposition of any of the property
described in this Collateral section.
OBLIGATION: Convertible Note and any, and all other indebtedness, liabilities
and obligations of the Debtor to the Secured Party now owing or hereinafter
incurred.
DATE: April 2002 and August 0000
XXXXXX: $2,100,000
MAKER: Continental Southern Resources, Inc.
--------------------------------
SECURITY AGREEMENT - PAGE 1
PAYEE: Trident Growth Fund, LP
FINAL MATURITY DATE: As provided therein
TERMS OF PAYMENT (OPTIONAL): As provided therein
Debtor grants to Secured Party a security interest in the Collateral and all its
proceeds to secure payment and performance of Debtor's obligation and all
renewals and extensions of any of the obligation.
DEBTOR'S WARRANTIES:
1. OWNERSHIP. Debtor owns the collateral and has the authority to grant
this security interest.
2. FIXTURES AND ACCESSIONS. None of the collateral is affixed to real
estate, is an accession to any goods, is commingled with other goods,
or will become a fixture, accession, or part of a product or mass with
other goods except as expressly provided in this agreement.
3. FINANCIAL STATEMENTS. All information about Debtor's financial
condition provided to Secured Party was accurate when submitted, as
will be any information subsequently provided.
DEBTOR'S COVENANTS:
1. PROTECTION OF COLLATERAL. Debtor will defend the collateral against
all claims and demands adverse to Secured Party's interest in it and
will keep it free from all liens except those for taxes not yet due
and from all security interests except this one. The collateral will
remain in Debtor's possession or control at all times, except as
otherwise provided in this agreement. Debtor will maintain the
collateral in good condition and protect it against misuse, abuse,
waste and deterioration except for ordinary wear and tear resulting
from its intended use.
2. SECURED PARTY'S COSTS. Debtor will pay all expenses incurred by
Secured Party in obtaining, preserving, perfecting, defending and
enforcing this security interest or the collateral and in collecting
or enforcing the Obligation. Expenses for which Debtor is liable
include, but are not limited to, taxes, assessments, reasonable
attorney's fees, and other legal expenses. These expenses will bear
interest from the dates of payments at the highest rate stated in
notes that are part of the obligation, and Debtor will pay Secured
Party this interest on demand at a time and place reasonably specified
by Secured Party. These expenses and interest will be part of the
obligation and will be recovered as such in all respects.
3. ADDITIONAL DOCUMENTS. Debtor will sign any papers that Secured Party
considers necessary to obtain, maintain, and perfect this security
interest or to comply with any relevant law.
4. NOTICE OF CHANGES. Debtor will immediately notify Secured Party of any
material change in the collateral other than in the ordinary course of
business; change in Debtor's name, address, or location; change in any
matter warranted or represented in this agreement; change that may
affect this security interest; and any event of default.
5. USE AND REMOVAL OF COLLATERAL. Debtor will use the collateral
primarily according to the stated classification unless Secured Party
consents otherwise in writing. Debtor will not permit the collateral
to be affixed to any real estate, to become an accession to any goods,
to be commingled with other goods, or to become a fixture, accession,
or part of a product or mass with other goods except as expressly
provided in this agreement or in the ordinary course of business.
--------------------------------
SECURITY AGREEMENT - PAGE 2
6. SALE. Debtor will not sell, transfer, or encumber any of the
collateral without the prior written consent of Secured Party other
than in the ordinary course of business.
7. If requested by Secured Party, debtor will receive and use reasonable
diligence to collect all accounts, accounts receivable, chattel paper,
instruments, documents and general intangibles, deposit accounts, in
trust, and to be held as property of the Secured Party, and to
immediately endorse as appropriate and deliver such rights to payment
and proceeds to Secured Party daily in the exact form in which they
are received together with a collection report in a form satisfactory
to Secured Party.
8. Debtor agrees not to commingle the rights to payment, proceeds or
collections thereunder with other property.
9. Debtor agrees, with regard to the collateral and proceeds, from time
to time when reasonably requested by Secured Party, to prepare and
deliver a schedule of all collateral and proceeds subject to this
agreement and to assign in writing and deliver to secured party all
accounts, contracts, leases and other chattel paper, instruments,
documents and other evidences thereof.
10. Debtor agrees with regard to the collateral and proceeds in the event
secured party elects to receive payments of rights to payment or
proceeds hereunder, to pay all reasonable expenses incurred by secured
party in connection therewith, including reasonable expenses of
accounting, correspondence, collection efforts, reporting to account
or contract debtors, filing, recording, record keeping and expenses
incidental thereto.
RIGHTS AND REMEDIES OF SECURED PARTY:
1. GENERALLY. Secured Party may exercise the following rights and remedies
after default:
a) take control of any proceeds of the collateral; b) release any
collateral in Secured Party's possession to any debtor, temporarily or
otherwise;
c) take control of any funds generated by the collateral, such as refunds
from and proceeds of insurance, and reduce any part of the obligation
accordingly or permit Debtor to use such funds to repair or replace
damaged or destroyed collateral covered by insurance; and
d) demand, collect, convert, redeem, settle, compromise, receipt for,
realize on, adjust, xxx for, and foreclose on the collateral either in
Secured Party's Debtor's name, as Secured Party desires.
EVENTS OF DEFAULT: Each of the following conditions is an Event of Default if
not cured within an applicable cure or grace period under any Loan Document by
and between Secured Party and Debtor:
1. if Debtor defaults in timely payment or performance of any obligation,
covenant, or liability in any written agreement between Debtor and
Secured Party or in any other transaction secured by this agreement;
2. if any warranty, covenant or representation made to Secured Party by
or on behalf of Debtor proves to have been false in any material
respect when made;
3. if a receiver is appointed for Debtor or any of the collateral;
4. if the collateral is assigned for the benefit of creditors or, to the
extent permitted by law, if bankruptcy or insolvency proceedings
commence against or by any of these parties: Debtor; any partnership
of which Debtor is a general partner; and any maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party, or other person
liable on or for any part of the obligation;
--------------------------------
SECURITY AGREEMENT - PAGE 4
5. if any financing statement regarding the collateral but not related to
this security and not favoring Secured Party is filed;
6. if any lien attaches to any of the collateral;
7. if any material amount of the collateral is lost, stolen, damaged, or
destroyed, unless it is promptly replaced with collateral of like
quality or restored to its former condition.
8. Secured party reasonably by and in good faith, believes that any or
all of the collateral and/or proceeds to be danger of misuse,
dissipation, commingling, loss, theft, damage or destruction, or
otherwise in jeopardy or unsatisfactory in character or value.
REMEDIES OF SECURED PARTY ON DEFAULT:
1. During the existence of any event of default, Secured Party may declare the
unpaid principal and earned interest of the obligation immediately due in
whole or part, enforce the obligation, and exercise any rights and remedies
granted by the Uniform Commercial Code or by this agreement, including the
following:
a) require Debtor to deliver to Secured Party all books and records
relating to the collateral;
b) require Debtor to assemble the collateral and make it available to
Secured Party at a place reasonably convenient to both parties;
c) take possession of any of the collateral and for this purpose enter
any premises where it is located if this can be done without breach of
the peace;
d) sell, lease, or otherwise dispose of any of the collateral in accord
with the rights, remedies, and duties of a secured party under
chapters 2 and 9 of the Texas Uniform Commercial Code after notice as
required by those chapters; unless the collateral threatens to decline
speedily in value, is perishable, or would typically be sold on a
recognized market, Secured Party will give Debtor reasonable notice of
any public sale of the collateral or of a time after which it may be
otherwise disposed of without further notice to Debtor; in this event,
notice will be deemed reasonable if it is mailed, postage prepaid, to
Debtor at the address specified in this agreement at least ten days
before any public sale or ten days before the time when the collateral
may be otherwise disposed of without further notice to Debtor; in this
event, notice will be deemed reasonable if it is mailed, postage
prepaid, to Debtor at the address specified in this agreement at least
ten days before any private sale or ten days before any public sale or
ten days before time when the collateral may be otherwise disposed of
without further notice to Debtor;
e) surrender any insurance policies covering the collateral and receive
the unearned premium;
f) apply any proceeds from disposition of the collateral after default in
the manner specified in chapter 9 of the Uniform Commercial Code,
including payment of Secured Party's reasonable attorney's fees and
court expenses; and
g) if disposition of the collateral leaves the obligation unsatisfied,
collect the deficiency from Debtor.
--------------------------------
SECURITY AGREEMENT - PAGE 4
GENERAL PROVISIONS
1. PARTIES BOUND. Secured Party's rights under this agreement shall inure to
the benefit of its successors and assigns. Assignment of any part of the
obligation and delivery by Secured Party of any part of the collateral will
fully discharge Secured Party from responsibility for that part of the
collateral. If Debtor is more than one, all their representations,
warranties, and agreements are joint and several. Debtor's obligations
under this agreement shall bind Debtor's personal representatives,
successors, and assigns.
2. WAIVER. Neither delay in exercise nor partial exercise of any Secured
Party's remedies or rights shall waive further exercise of those remedies
or rights. Secured Party's failure to exercise remedies or rights does not
waive subsequent exercise of those remedies or rights. Secured Party's
waiver of any default does not waive further default. Secured Party's
waiver of any right in this agreement or of any default is binding only if
it is in writing. Secured Party may remedy any default without waiving it.
3. REIMBURSEMENT. If Debtor fails to perform any of Debtor's obligations,
Secured Party may perform those obligations and be reimbursed by Debtor on
demand at the place where the note is payable for any sums so paid,
including attorney's fees and other legal expenses, plus interest on those
sums from the dates of payment at the rate stated in the note for matured,
unpaid amounts. The sum to be reimbursed shall be secured by this security
agreement.
4. INTEREST RATE. Interest included in the obligation shall not exceed the
maximum amount of nonusers interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that
maximum amount shall be credited to the principal of the obligation or, if
that has been paid, refunded. On any acceleration or required or permitted
prepayment of the obligation, any such excess shall be canceled
automatically as of the acceleration or prepayment or, if already paid,
credited on the principal amount of the obligation or, if the principal
amount has been paid or refunded. This provision overrides other provisions
in this and all other instruments concerning the obligation.
5. MODIFICATIONS. No provisions of this agreement shall be modified or limited
except by written agreement. 6. SEVERABILITY. The unenforceability of any
provision of this agreement will not effect the enforceability or validity
of any other provision.
7. AFTER-ACQUIRED CONSUMER GOODS. This security interest shall attach to
after-acquired consumer goods only to the extent permitted by law.
8. APPLICABLE LAW. This agreement will be construed according to Texas laws.
9. PLACE OF PERFORMANCE. This agreement is to be performed in the county of
Secured Party's mailing address.
10. FINANCING STATEMENT. A carbon, photographic, or other reproduction of this
agreement or any financing statement covering the collateral is sufficient
as a financing statement.
11. PRESUMPTION OF TRUTH AND VALIDITY. If the collateral is sold after default,
recitals in the xxxx of sale or transfer will be prima facie evidence of
their truth, and all prerequisites to the sale specified by this agreement
and by the Texas Uniform Commercial Code will be presumed satisfied.
12. SINGULAR AND PLURAL. When the context requires, singular nouns and pronouns
include the plural.
13. PRIORITY OF SECURITY INTEREST. Neither extensions of any of the obligation
nor releases of any of the collateral will affect the priority of validity
of this security interest with reference to any third person.
--------------------------------
SECURITY AGREEMENT - PAGE 5
14. CUMULATIVE REMEDIES. Foreclosure of this security interest by suit does not
limit secured Party's remedies, including the right to sell the collateral
under the terms of this agreement. All remedies of Secured Party may be
exercised at the same or different times, and no remedy shall be a defense
to any other. Secured Party's rights and remedies include all those granted
by law or otherwise, in addition to those specified in this agreement.
15. AGENCY. Debtor's appointment of Secured Party as Debtor's agent is coupled
with an interest and will survive any disability of Debtor.
16. ATTACHMENTS INCORPORATED. The addendum indicated below is attached to this
agreement and incorporated into it for all purposes:
a) ( ) addendum relating to accounts, inventory, documents, chattel
paper, and general intangibles
b) ( ) addendum relating to instruments
Secured Party:
------------------------------------
By:
Debtor:
By: /s/ XXXXXXX X. XXXXXXXXXX
-----------------------------------
Title:
By:
------------------------------------
Title:
--------------------------------
SECURITY AGREEMENT - PAGE 6
