SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of December 1, 1999,
by and between American International Petroleum Corporation., a Nevada
corporation ("AIPC") and St. Marks Refinery, Inc., a Florida corporation ("St.
Marks") (AIPC and St. Marks are collectively referred to as the "Debtors"), and
__________________________ ("Secured Party").
1. Definitions.
(a) Certain Defined Terms. The following terms, as used herein, have the
meanings set forth below:
"Accounts" means all of the following: (a) accounts receivable, contract
rights, book debts, notes, drafts and other obligations and indebtedness arising
from the sale, lease or exchange of goods or other property and/or the
performance of services; (b) rights in, to and under all purchase orders for
goods, services or other property; (c) rights to any goods, services or other
property represented by any of the foregoing (including returned or repossessed
goods and unpaid sellers' rights of rescission, replevin, reclamation and rights
to stoppage in transit); (d) monies due to or to become due under all contracts
for the sale, lease or exchange of goods or other property and/or the
performance of services (whether or not yet earned by performance); and (e)
Proceeds of any of the foregoing and all collateral security and guaranties of
any kind given by any Person with respect to any of the foregoing.
"Collateral" has the meaning assigned to that term in Section 3.
"Documents" means all "documents" (as defined in the UCC) or other receipts
covering, evidencing or representing goods.
"Equipment" means all "equipment" (as defined in the UCC), including,
without limitation, all machinery, motor vehicles, trucks, trailers, vessels,
aircraft and rolling stock and all parts thereof and all additions and
accessions thereto and replacements therefor.
"Event of Default" has the meaning assigned to that term in Section 9.
"Fixtures" means all plant fixtures, business fixtures, other fixtures and
storage office facilities and all additions and accessions thereto and
replacements therefor.
"General Intangibles" means all "general intangibles" (as defined in the
UCC), including, without limitation: (a) all agreements, leases, licenses and
contracts to which Debtor is or may become a party; (b) all obligations or
indebtedness owing to Debtor (other than Accounts) from whatever source arising;
(c) all tax refunds; (d) all intellectual property; (e) all choses in action and
causes of action; and (f) all trade secrets and other confidential information
relating to the business of Debtor.
"Instruments" means all "instruments," "chattel paper" or "letters of
credit" (each as defined in the UCC) including, but not limited to, promissory
notes, drafts, bills of exchange and trade acceptances.
"Inventory" means all "inventory" (as defined in the UCC), including,
without limitation, finished goods, raw materials, work in process and other
materials and supplies (including packaging and shipping materials) used or
consumed in the manufacture or production thereof and returned and repossessed
goods.
"Investment Property" means all "investment property" (as defined in the
UCC), including certificated and uncertificated securities, security
entitlements, securities accounts, commodity contracts and commodity accounts
(each as defined in the UCC).
Note - means that certain Bridge Note of even date herewith, in the
original principal amount of $2,500,000, made and executed by AIPC and issued to
Secured Party, and all amendments and supplements thereto, restatements thereof
and renewals, extensions, restructuring and refinancings thereof.
Person - means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
Proceeds - means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral including, without limitation, all claims against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned
premiums with respect to, policies of insurance with respect to any Collateral,
and any condemnation or requisition payments with respect to any Collateral, in
each case whether now existing or hereafter arising.
Secured Obligations - has the meaning assigned to that term in Section 4.
Security Interests - means the security interests granted pursuant to
Section 3, as well as all other security interests created or assigned as
additional security for the Secured Obligations pursuant to the provisions of
this Agreement.
Securities Purchase Agreement - means that certain Securities Purchase
Agreement of even date herewith, by and between Debtors and Secured Party.
UCC - means the Uniform Commercial Code as in effect on the date hereof in
the State of New York, provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy.
2. Other Definition Provisions. References to "Sections", "subsections",
"Exhibits" and "Schedules" shall be to Sections, subsections, Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in Section 1(a) may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference. All references to statutes and related regulations shall include
(unless otherwise specifically provided herein) any amendments of same and any
successor statutes and regulations.
3. Grant of Security Interests
In order to secure the payment and performance of the Secured Obligations
in accordance with the terms thereof, Debtors hereby grant to Secured Party a
continuing security interest in and to all right, title and interest of Debtors
in the collateral (and any Proceeds therefrom) described on Exhibit A hereto,
whether now owned or existing or hereafter acquired or arising (all being
collectively referred to as the "Collateral").
4. Security for Obligations
This Agreement secures the payment and performance of the Securities
Purchase Agreement and the Note, and all renewals, extensions, restructuring and
refinancings thereof (the "Secured Obligations").
5. Representations and Warranties. Debtors represent and warrant as
follows:
(a) Binding Obligation. This Agreement is the legally valid and binding
obligation of Debtors, enforceable against Debtors in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws or equitable principles relating to or limiting
creditor's rights generally.
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(b) Ownership of Collateral. Debtors own the Collateral free and clear of any
lien, security interest or encumbrance. No effective financing statement or
other form of lien notice covering all or any part of the Collateral is on file
in any recording office.
(c) Office Locations; Debtors Names.
(i) As of the date hereof, the chief place of business, the chief
executive office and the office where each of the Debtors keeps its
books and records is located at the place specified on Schedule
5(d)(i) hereto. Except as set forth on Schedule 5(d)(i), Debtors have
not maintained any other address at any time during the five years
preceding the date hereof.
(ii) Debtors do not do business nor, as of the date hereof, has it
done business during the past five years under any corporate name,
trade name or fictitious business name except for Debtors' corporate
name set forth above and except as disclosed on Schedule 5(d)(ii)
hereto.
(d) Perfection. This Agreement, together with the UCC filings referenced
herein, and delivery of the Collateral to Secured Party as of the Closing (as
such term is defined in the Securities Purchase Agreement) create to secure the
Secured Obligations a valid, perfected and first priority security interest in
the Collateral, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. Debtors hereby
agree to deliver the Collateral to Secured Party as of the Closing.
(e) Governmental Authorizations; Consents. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body or consent of any other Person is required either (i) for the
grant by Debtors of the Security Interests granted hereby or for the execution,
delivery or performance of this Agreement by Debtors or (ii) for the perfection
of or the exercise by Secured Party of its rights and remedies hereunder (except
as may have been taken by or at the direction of Debtors or Secured Party) other
than the filing of financing statements in connection with the perfection of the
Security Interests.
(f) Value of Collateral. The aggregate value of the collateral as of the
date hereof is equal to not less than $2,500,000 and the value of the Debenture
described in Exhibit A has an outstanding principal amount as of the date hereof
of $1,500,000.00.
(g) Accurate Information. All information heretofore, herein or hereafter
supplied to Secured Party by or on behalf of Debtors with respect to the
Collateral is and will be accurate and complete in all material respects.
6. Further Assurances; Covenants
(a) Other Documents and Actions. Debtors will, from time to time, at their
expense, promptly execute and deliver all further instruments and documents and
take all further action that may be necessary or desirable, or that Secured
Party may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Debtors will: (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted hereby; (ii)
at any reasonable time, upon demand by Secured Party exhibit the Collateral to
allow inspection of the Collateral by Secured Party or persons designated by
Secured Party; and (iii) upon Secured Party's request, appear in and defend any
action or proceeding that may affect Debtors' title to or Secured Party's
security interest in the Collateral.
(b) Secured Party Authorized. Debtors hereby authorize Secured Party to
file one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signatures of Debtors
where permitted by law.
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(c) Corporate or Name Change. Debtors will notify Secured Party promptly in
writing at least 30 days prior to (a) any change in Debtors' name and (b)
Debtors' commencing the use of any trade name, assumed name or fictitious name.
(d) Business Locations. Debtors shall give Secured Party thirty (30) days'
prior written notice of any change in its chief place of business or of any new
location of business or any new location for any of the Collateral. With respect
to any new location (which in any event shall be within the continental United
States), Debtors shall execute such documents and take such actions as Secured
Party reasonably deems necessary to perfect and protect the Security Interests.
(e) Bailees. No Collateral shall at any time be in the possession or
control of any warehouseman, bailee or Debtors' agents or processors without
Secured Party's prior written consent and unless Secured Party, if Secured Party
has so requested, has received warehouse receipts or bailee letters reasonably
satisfactory to Secured Party prior to the commencement of such storage. Debtors
shall, upon the request of Secured Party, notify any such warehouseman, bailee,
agent or processor of the Security Interests.
(f) Insurance. Debtors shall maintain insurance with respect to the
Collateral of types and in amounts that are customary for similarly situated
businesses. Debtors hereby direct all insurers under such policies of insurance
with respect to its assets to pay all material proceeds of such insurance
policies to Secured Party.
(g) Taxes and Claims. Debtors will pay (i) all taxes, assessments and other
governmental charges imposed upon the Collateral before any penalty accrues
thereon and (ii) all claims (including claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a lien upon any of the Collateral before any penalty or fine is incurred
with respect thereto; provided that no such tax, charge or claim need be paid if
a Debtors are contesting same in good faith by appropriate proceedings promptly
instituted and diligently conducted and if Debtors have established such reserve
or other appropriate provision, if any, as shall be required in conformity with
generally accepted accounting principles consistently applied.
(h) Collateral Description. Debtors will furnish to Secured Party, from
time to time, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Secured
Party may reasonably request, all in reasonable detail.
(i) Use of Collateral; Renegotiation of Terms of Debenture. Debtors will
not use or permit any Collateral to be used unlawfully or in violation of any
provision of this Agreement or any applicable statue, regulation or ordinance or
any policy of insurance covering any of the Collateral. Notwithstanding the
foregoing, Secured Party hereby agrees to permit Debtors to renegotiate the
terms or form of the $3,000,000 Principal Amount 5% Exchangeable Subordinated
Debenture described on Exhibit A hereto, which Debenture constitutes a portion
of the Collateral; provided, however, the Debenture as so amended shall not have
a value of less than $1.5 million principal amount and shall have terms and
conditions no less favorable than those presently existing.
(j) Records of Collateral. Debtors shall keep full and accurate books and
records relating to the Collateral and shall stamp or otherwise xxxx such books
and records in such manner as Secured Party may reasonably request indicating
that the Collateral is subject to the Security Interests.
(k) Other Information. Debtors will, promptly upon request, provide to
Secured Party all information and evidence it may reasonably request concerning
the Collateral to enable Secured Party to enforce the provisions of this
Agreement.
7. Secured Party Appointed Attorney-in-Fact. Debtors hereby irrevocably
appoint Secured Party as its attorney-in-fact, with full authority in the place
and stead of Debtors and in the name of Debtors, Secured Party or otherwise,
from time to time in Secured Party's discretion to take any action and to
execute any instrument that Secured Party may deem necessary or advisable after
the occurrence and during the continuation of an Event of Default to accomplish
the purposes of this Agreement, including, without limitation:
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(a) to obtain and adjust insurance required to be paid to Secured Party;
(b) to ask, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for monies due and to become due under or in respect of
any of the Collateral;
(c) to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(d) to pay or discharge taxes or liens, levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Secured Party in its sole
discretion, and such payments made by Secured Party to become obligations of
Debtors, due and payable immediately without demand and secured by the Security
Interests; and
(e) generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Debtors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral.
Neither Secured Party nor any Person designated by Secured Party shall be
liable for any acts or omissions or for any error of judgment or mistake of fact
or law other than as a result of Secured Party's or such Person's gross
negligence or wilful misconduct. This power, being coupled with an interest, is
irrevocable so long as this Agreement shall remain in force.
8. Transfers and Other Liens
Debtors shall not without Secured Party's prior written consent:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral.
(b) Create or suffer to exist any lien, security interest or other
charge or encumbrance upon or with respect to any of the Collateral to
secure indebtedness of any Person except for the security interest created
by this Agreement.
9. Events of Default.
The occurrence of any one or more of the following events shall constitute
an Event of Default by Debtors under this Agreement:
(a) General Default. AIPC shall fail to observe or perform any
covenant, obligation, term or condition contained in the Securities
Purchase Agreement, the Note, the Mortgage and Security Agreement by and
between St. Marks and Secured Party of even date herewith (the "Mortgage")
or this Agreement.
(b) Nonpayment. AIPC shall fail to pay any principal, interest or
other amount owing under the Note or Securities Purchase Agreement when and
as the same shall be due and payable.
(c) Material Misrepresentations. Any representation or warranty set
forth herein shall prove to be false in any material respect.
(d) Going Concern. Debtors shall terminate their corporate existence
or shall cease to operate as a going concern.
(e) Judgments. A judgment shall be entered against either Debtor or a
warrant of execution or similar process shall be issued or levied against
its property and within thirty (30) days after such judgment, warrant or
process shall not have been paid in full or proper appeal of the same made.
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(f) Debtors Relief - Voluntary. Debtors shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing.
(g) Debtors Relief - Involuntary. Any involuntary case or other
proceeding shall be commenced against Debtors seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of thirty (30) days; or an order for relief shall be
entered against Debtors under the federal bankruptcy laws as now or
hereafter in effect.
(h) Other. The occurrence any "Event of Default" as that term is
defined in Securities Purchase Agreement or Mortgage.
10. Remedies
(a) If any Event of Default shall have occurred and be continuing, Secured
Party may declare the entire outstanding principal amount of the Note
immediately due and payable, provided that upon the occurrence of any Event of
Default set forth in Section 9(f) or 9(g), the outstanding principal amount of
the Note shall become automatically due and payable, without any notice, demand
or other action on the part of Secured Party.
(b) If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may: (i) require Debtors to, and
Debtors hereby agree that it will, at its expense and upon request of Secured
Party forthwith, assemble all or part of the Collateral as directed by Secured
Party and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties; (ii) without
notice or demand or legal process, enter upon any premises of Debtors and take
possession of the Collateral; (iii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere, at such time or
times, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as Secured Party may deem commercially reasonable;
(iv) notify the obligors on any Accounts or Instruments to make payments
thereunder directly to Secured Party; and (v) without notice to Debtors, renew,
modify or extend any of the Accounts and Instruments or grant waivers or
indulgences with respect thereto or accept partial payment thereof, or
substitute any obligor thereon, in any manner as Secured Party may deem
advisable, without affecting or diminishing Debtors' continuing obligations
hereunder. Debtors agree that, to the extent notice of sale shall be required by
law, at least ten days' notice to Debtors of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. At any sale of the Collateral, if permitted by law,
Secured Party may bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) for the purchase of the Collateral or any portion
thereof for the account of Secured Party. Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the extent permitted by law, Debtors hereby specifically waive all rights of
redemption, stay or appraisal which it has or may have under any law now
existing or hereafter enacted.
(c) Upon the occurrence of an Event of Default hereunder, Secured Party
shall have the right to enter upon the premises of Debtors where the Collateral
is located (or is believed to be located) without any obligation to pay rent to
Debtors, or any other place or places where the Collateral is believed to be
located and kept, to render the Collateral useable or saleable, to remove the
Collateral therefrom to the premises of Secured Party or any agent of Secured
Party for such time as Secured Party may desire in order to effectively collect
or liquidate the
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Collateral, and/or to require Debtors to assemble the Collateral and make it
available to Secured Party at a place or places to be designated by Secured
Party. Upon the occurrence of an Event of Default hereunder, Secured Party shall
have the right to take possession of Debtors' original books and records, to
obtain access to Debtors' data processing equipment, computer hardware and
software relating to the Collateral and to use all of the foregoing and the
information contained therein in any manner Secured Party deems appropriate; and
Secured Party shall have the right to notify postal authorities to change the
address for delivery of Debtors' mail to an address designated by Secured Party
and to receive, open and dispose of all mail addressed to Debtors.
11. Limitation on Duty of Secured Party with Respect to Collateral. Beyond
the safe custody thereof, Secured Party shall have no duty with respect to any
Collateral in its possession or control (or in the possession or control of any
agent or bailee) or with respect to any income thereon or the preservation of
rights against prior parties or any other rights pertaining thereto. Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property. Secured
Party shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by Secured Party in good faith.
12. Application of Proceeds. Upon the occurrence and during the continuance
of an Event of Default, the proceeds of any sale of, or other realization upon,
all or any part of the Collateral shall be applied: first, to all fees, costs
and expenses incurred by Secured Party with respect to the Collateral; and
second, to the Secured Obligations. Secured Party shall pay over to Debtors any
surplus and Debtors shall remain liable for any deficiency.
13. Expenses. Debtors agree to pay all insurance expenses and all expenses
of protecting, storing, warehousing, appraising, insuring, handling, maintaining
and shipping the Collateral, all costs, fees and expenses of perfecting and
maintaining the Security Interests, and any and all excise, property, sales and
use taxes imposed by any state, federal or local authority on any of the
Collateral, or with respect to periodic appraisals and inspections of the
Collateral, or with respect to the sale or other disposition thereof. If Debtors
fail promptly to pay any portion of the above expenses when due or to perform
any other obligation of Debtors under this Agreement, Secured Party may, at its
option, but shall not be required to, pay or perform the same, and Debtors agree
to reimburse Secured Party therefor on demand. All sums so paid or incurred by
Secured Party for any of the foregoing, any and all other sums for which Debtors
may become liable hereunder and all costs and expenses (including attorneys'
fees, legal expenses and court costs) incurred by Secured Party in enforcing or
protecting the Security Interests or any of their rights or remedies under this
Agreement shall be payable on demand, shall constitute Secured Obligations,
shall bear interest until paid at the rate provided in the Note and shall be
secured by the Collateral.
14. Termination of Security Interests; Release of Collateral. Upon payment
in full of all Secured Obligations, the Security Interests shall terminate and
all rights to the Collateral shall revert to Debtors. Upon such termination of
the Security Interests or release of any Collateral, Secured Party will, at the
expense of Debtors, execute and deliver to Debtors such documents as Debtors
shall reasonably request to evidence the termination of the Security Interests
or the release of such Collateral, as the case may be.
15. Notices. Each notice, communication and delivery under this Agreement:
(a) shall be made in writing signed by the party giving it; (b) shall specify
the section of this Agreement pursuant to which given; (c) shall either be
delivered in person or by telecopier, a nationally recognized next business day
courier service or Express Mail; (d) unless delivered in person, shall be given
to the address specified below; (e) shall be deemed to be given (i) if delivered
in person, on the date delivered, (ii) if sent by telecopier, on the date of
telephonic confirmation of receipt, (iii) if sent by a nationally recognized
next business day courier service with all costs paid, on the next business day
after it is delivered to such courier, or (iv) if sent by Express Mail (with
postage and other fees paid), on the next business day after it is mailed. Such
notice shall not be effective unless copies are provided contemporaneously as
specified below, but neither the manner nor the time of giving notice to those
to whom copies are to be given (which need not be the same as the addressee)
shall control the date notice is given or received. The addresses and
requirements for copies are as follows:
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If to AIPC:
American International Petroleum Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000)000-0000
Confirmation No. (000)000-0000
Attention: Xxxxx Xxxxxxxxxxx, Chief Financial Officer
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If to St. Marks:
St. Marks Refinery, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Telecopier No. ________________
Confirmation No. _______________
Attention: Xxxxx Xxxxxxxxxxx
If to Secured Party:
with a copy to:
16. Waivers, Non-Exclusive Remedies, Severability. Except as otherwise
expressly set forth in any particular provision of this Agreement, any consent
or approval required or permitted by this Agreement to be given by Secured Party
may be given, and any term of this Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
Debtors of any term of this Agreement, the Securities Purchase Agreement or the
Note may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written specific
consent of Secured Party. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of Secured Party in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon Debtors shall entitle Debtors to other or further notice or demand
in similar or other circumstances. The rights in this Agreement, the Securities
Purchase Agreement and the Note are cumulative and are not exclusive of any
other remedies provided by law. The invalidity, illegality or unenforceability
of any provision in or obligation under this Agreement shall not affect or
impair the validity, legality or enforceability of the remaining provisions or
obligations under this Agreement.
17. Successors and Assigns. This Agreement is for the benefit of Secured
Party and its successors and assigns, and in the event of an assignment of all
or any of the Secured Obligations, the rights hereunder, to the extent
applicable to the Secured Obligations so assigned, may be transferred with such
Secured Obligations. This Agreement shall be binding on Debtors and their
successors and assigns, provided that Debtors shall not assign this Agreement
without Secured Party's prior written consent.
18. Changes in Writing. No amendment, modification, termination or waiver
of any provision of this Agreement or consent to any departure by Debtors
therefrom, shall in any event be effective without the written concurrence of
Secured Party and Debtors.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of law principles thereof.
20. Headings. Cross reference pages and headings contained herein are for
convenience of reference only, do not constitute a part of this Agreement, and
shall not be deemed to limit or affect any of the provisions hereof.
21. Counterparts. This Agreement may be executed by each party upon a
separate copy, and in such case one counterpart of this Agreement shall consist
of enough of such copies to reflect the signatures of all of the parties. This
Agreement may be executed in two or more counterparts, each of which shall be an
original, and each of which shall constitute one and the same agreement. Any
party may deliver an executed copy of this Agreement and of any documents
contemplated hereby by facsimile transmission to another party and such delivery
shall have the same force and effect as any other delivery of a manually signed
copy of this Agreement or of such other documents.
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DULY EXECUTED and delivered by the parties on the date first written above.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
ST. MARKS REFINERY, INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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EXHIBIT A
COLLATERAL
1. Two thousand five hundred shares of St. Marks Refinery, Inc., a Florida
corporation ("St. Marks") evidenced by Stock Certificate No. 2, such shares
being the only outstanding shares of St. Marks.
2. The $_________________ Principal Amount 5% Exchangeable Subordinated
Debenture made by American International Petroleum Corporation of Columbia
payable to AIPC and dated February 25, 1997.
11
SCHEDULE 5(d)(i)
12
SCHEDULE 5.2(d)(ii)
13
