Exhibit 10.22
SECURITY AGREEMENT
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THE STATE OF TEXAS
COUNTY OF XXXXXX
CHENIERE ENERGY OPERATING CO., INC., whose address is Suite 1710, Two Xxxxx
Center, 0000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000-0000 in Xxxxxx County, Texas ,
being the owner and holder of the personal property described on Exhibit "A"
(herein called "Collateral"), as '1Debtor, " and Xxx Xxxxx, whose address is
Suite 1710, Two Xxxxx Center, 0000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000-0000 in
Xxxxxx County, as "Secured Party," agree as follows:
I.
COLLATERAL
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Debtor hereby grants to Secured Party a security interest in and to:
A. all of the personal property described on Exhibit "A" attached to this
Security Agreement.
B. all proceeds of the personal property described in Exhibit "A" as such
term is defined in the Uniform Commercial Code.
For purposes of this Security Agreement, the herein above described assets
are referred to as the "Collateral."
II.
OBLIGATIONS
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This Security Agreement is executed by Debtor to secure performance of
Debtor's obligations under that one (1) certain Promissory Note, of even date
herewith, in the original, principal sum of $500,000, executed by Debtor and
payable to the order of Secured Party, and maturing on August 29, 1997, the
obligation of Debtor to make all payments, jointly and severally, under such
Note, together with all costs of collection (if any) including reasonable
attorney's fees and trustee's fees are hereinafter referred to as the
"obligations. The Obligations shall include all extensions, renewals,
rearrangements, or modifications of the herein above described Note and any and
all other indebtedness, liability and obligations whatsoever of whatever nature
of Debtor to Secured Party, whether direct or indirect, absolute or contingent,
primary or secondary, due or to become due, and whether now existing or
hereafter arising and howsoever evidenced or acquired, whether joint or several,
and Debtor acknowledges that the security interest hereby granted shall secure
all future advances, as well as any and all other indebtedness, liabilities and
Obligations of Debtor to Secured Party, now existing, or arising hereafter.
III
COVENANTS OF DEBTOR
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A. Debtor shall pay to Secured Party any sum or sums due or which may
become due on the Obligations secured hereby in accordance with the terms of
such Obligations and the terms of this Security Agreement. Debtor shall pay to
Secured Party on demand all expenses and expenditures, including reasonable
attorney's fees and other legal expenses incurred or paid by Secured Party in
exercising or protecting its interest, rights and remedies under this Security
Agreement. Debtor shall pay immediately, without notice, the entire unpaid
indebtedness of Debtor to Secured Party, whether created or incurred pursuant to
this Security Agreement or otherwise, upon Debtor's default under this Security
Agreement.
B. Secured Party shall have the power to endorse any instrument described
as a portion of the "Collateral" above and Debtor hereby grants to Secured Party
a limited power of attorney, deemed coupled with an interest, for the purposes
of endorsing in the name of Debtor any such instrument or document constituting
Collateral or which may be received in payment for or as proceeds of the
Collateral.
C. Debtor authorized Secured Party, without the necessary joinder by
Debtor, to file in all jurisdictions where this authorization will be given fill
force and effect, one or more Financing Statements, executed only by Secured
Party, covering all or any portion of the Collateral. At the request of Secured
Party, Debtor covenants to join Secured Party in executing one or more of such
Financing Statements under the terms and provisions of the Texas Business and
Commerce Code, which Financing Statements will be in a form and content
acceptable to Secured Party and Debtor covenants to pay the cost of filing all
such Financing Statements, to the extent such filing is deemed by Secured Party
to be necessary or desirable, but Debtor's failure to execute any such Financing
Statement shall not affect the contents thereof or the Obligation of Debtor
hereunder.
IV.
REPRESENTIONS AND WARRANTIES OF DEBTOR
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Debtor represents, warrants and agrees that:
A. Debtor owns the Collateral herein described and has the right to
transfer any interest therein; the Collateral is not subject to the interest of
any third party; and Debtor will defend the Collateral and its proceeds against
the claims and demands of all third parties.
B. Secured Party's duty with reference to the Collateral shall be solely
to use reasonable care in the custody and preservation of the Collateral in
Secured Party's possession.
C. Demand, notice, protest and all demands and notices of any action taken
by Secured Party under this Security Agreement or in connection with the
Obligations secured hereby, except as otherwise provided in this Security
Agreement, are hereby waived, and any indulgence of Secured Party, substitution
for, exchange of or release of Collateral, in whole or in part, or addition or
release of any person liable on the Collateral is assented and consented to.
D. Secured Party shall not be responsible in any way for any depreciation
in the value of the Collateral, nor shall any duty or responsibility whatsoever
rest upon Secured Party to take
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necessary steps to preserve rights against prior parties or to enforce
collection of the Collateral by legal proceedings or otherwise, the sole duty of
Secured Party, its successors and assigns, being to receive collections,
remittances and payments on such Collateral as and when made and received by
Secured Party, and at Secured Party's option, applying the amount or amounts so
received after deduction of any collection costs incurred, as payment upon any
obligation of Debtor to Secured Party pursuant to the provisions of this
Security Agreement, or holding the same for the account and order of Debtor.
E. The address of Debtor, designated herein above, is a current address of
Debtor and Debtor agrees that Debtor will not change such address without prior
written notice to Secured Party.
F. Debtor agrees to execute such powers of attorney, pledge agreements,
endorsements of securities or other instruments, or other documents which may be
reasonably required by Secured Party in order to effectively grant to Secured
Party the security interest in and to the Collateral herein above described and
to enforce Secured Party's rights regarding same if in accordance with the
provisions of the Texas Business and Commerce Code, or otherwise.
V
EVENTS OF DEFAULT
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Debtor shall be in default under this Security Agreement upon the happening
of any of the following events or conditions, which shall be continuing for five
(5) days after notice by Secured Party (herein called an "Event of Default"):
A. Debtor's failure to pay when due any installment of principal or
interest on any Note executed by Debtor and payable to the order of Secured
Party, or to pay, following demand from Secured Party, any costs of collection
of such Note, including reasonable attorney's fees and trustee's fees in
connection with Debtor's default under the provisions of any such Note.
B. Default by Debtor in the punctual performance of any of the
Obligations, covenants, terms or provisions contained or referred to in this
Security Agreement or the Obligations or any part thereof.
C. The making of any levy on or seizure or attachment of any of the
Collateral.
D. Debtor's assignment of any assets for the benefit of creditors; the
commission of any act of bankruptcy; the institution of voluntary or involuntary
proceedings under the provisions of the United States Bankruptcy Code; the
exercise of dominion or control over any of the Collateral by a receiver for the
benefit of Debtor or Debtor's creditors; or the placing of any of the Collateral
in the custody of any court of competent jurisdiction or any officer, appointee,
or designee of such court.
E. The discovery by Secured Party that any representation or warranty made
by Debtor is, in any material respect, untrue, as of the date such
representation or warranty is made or furnished.
F. Secured Party's determination that the value of the Collateral has been
impaired, as a result of the action of Debtor, or any third person, or that the
value of such Collateral is insufficient,
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as a result of economic circumstances, to adequately secure Secured Party's
interest and ensure payment of the Obligation to Secured Party as contemplated
hereby, coupled with failure of Debtor to deliver to Secured Party additional
Collateral as contemplated in Section m above.
G. The granting by Debtor of any security interest in the Collateral or
any portion thereof to any third party without the prior written consent of
Secured Party (which security interest, if granted, shall, in all events, be
secondary, inferior and subordinate to the security interest granted herein).
H. The receipt by Debtor of any notice by any taxing authority of such
authority's intent to place or Fix a lien on part or all of the Collateral.
VI.
AUTHORITY OF SECURED PARTY
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A. This Security Agreement, Secured Party's rights hereunder, or the
Obligations secured hereby may be assigned from time to time, and in any such
case the Assignee shall be entitled to all of the rights, privileges and
remedies granted in this Security Agreement to Secured Party, and Debtor will
assert no claims or defenses Debtor may have against Secured Party or against
the Assignee except those granted in this Security Agreement.
B. Secured Party may at any time transfer the Collateral to itself or its
nominee, receive income, including money, thereon and hold the income as
Collateral or apply the income to the indebtedness secured hereby, the manner
and distribution of the application to be in the sole discretion of Secured
Party.
C. Secured Party may at any time demand, xxx for, collect or make any
compromise or settlement with reference to the Collateral as Secured Party, in
its sole discretion, chooses.
D. Secured Party may delay exercising or omit to exercise any right or
remedy under this Security Agreement without waiving that or any other past,
present, or future right or remedy, except in writing signed by Secured Party.
VII.
REMEDIES OF SECURED PARTY
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Upon the occurrence of an Event of Default, and at any time thereafter:
A. Secured Party may declare the Obligations secured hereby immediately
performable.
B. Secured Party shall have, then or at any time thereafter, the rights
and remedies provided in the Uniform Commercial Code in force in the State of
Texas at the date of execution of this Security agreement.
C. In addition to the rights and remedies referred to above, Secured Party
may, in its discretion, sell, assign and deliver all or any part of the
Collateral at public or private sale without notice or advertisement, and bid
and become purchaser at any public sale.
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D. If notice to Debtor is required by the Uniform Commercial Code of Texas
of public or private sale of Collateral, Secured Party may give written notice
to Debtor five (5) days prior to the date of public sale of the Collateral or
prior to the date after which private sale of the Collateral will be made, by
mailing such notice to Debtor at the address designated at the beginning of this
Security Agreement. Secured Party may apply the proceeds of any disposition of
Collateral available for satisfaction of the Obligations and expenses of sale in
any order of preference which Secured party, in its sole discretion, chooses.
Debtor shall remain liable for any deficiency.
E. Upon any sale of any portion of the Collateral, Secured Party shall
have the right to deliver to the purchaser thereof all or any portion of the
Collateral, free and clear of any claim or right of Debtor, or any person
claiming by, through or under Debtor. The Collateral may be sold separately or
combined with the collateral of other debtors as Secured Party deems necessary
or desirable.
F. Secured Party shall not be obligated to make any sale pursuant to any
notice of sale herein provided and Secured Party may, without notice or
publication, adjourn any public or private sale or cause such sale to be
adjourned, from time to time, by written or oral announcement, given at the time
and place fixed for such sale and may reconvene such sale, pursuant to such
notice of adjournment, at any time or place designated by Secured Party in such
announcement.
G. In case of sale of all or any portion of the Collateral, on credit or
for future delivery, Secured Party shall be authorized to retain the Collateral
until the purchase price is paid by the purchaser thereof, or to deliver such
Collateral to the purchaser, on credit, but Secured Party shall incur no
liability for the failure of any such purchaser to pay for such Collateral so
sold and, in the event such purchaser fails to pay for such Collateral so sold,
Secured Party may repossess such Collateral and again offer it for sale in
accordance with the terms and provisions of this Security Agreement.
H. Secured Party shall not be required to conduct any sale of any of the
Collateral, pursuant to this Security Agreement, and shall be authorized to
proceed with collection of the Obligations from Debtor by all legal means
including, but not limited to, institution of a suit in a court of competent
jurisdiction for collection of the Obligations.
VIII.
MISCELLANEOUS PROVISIONS
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A. "Secured Party" and "Debtor" as used in this instrument shall include
the heirs, executors, administrators, legal representatives, successors and
assigns of such parties, including without limitation, receivers, trustees or
guardians of such parties.
B. Terms used in this instrument which are defined in the Texas Business
and Commerce Code are intended hereby to be used with the meanings therein
defined.
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C. The provisions of this Agreement shall be construed under and in
accordance with the provisions of the laws of the State of Texas, including,
without limitation, the Texas Business and Commerce Code. The jurisdiction for
any controversy arising hereunder shall be in the courts of competent
jurisdiction of Xxxxxx County, Texas, to the fullest extent permissible by Texas
law.
D. No delay or omission, on the part of Secured Party, to exercise any of
Secured Party's rights hereunder, shall operate as a waiver of any such right.
No acceptance by Secured Party of any payment after the due date thereof shall
be deemed to be a waiver by Secured Party of the provisions for event of default
hereunder.
E. The security interest granted hereby, and all of the terms and
provisions contained herein, shall be deemed to constitute a continuing security
interest and shall remain in full force and effect, as between the parties,
until the repayment by Debtor of all of the Obligations as set forth herein and
the receipt, acceptance and acknowledgment of such payment on the part of
Secured Party, coupled with Secured Party's revocation of the terms and
provisions of this Security Agreement.
F. Any notice or demand given by Secured Party to Debtor in connection
with this Security Agreement, the Collateral or the Obligations, shall be deemed
given and effective three (3) days after deposit in the United States mail,
postage prepaid, certified mail return receipt requested, addressed to Debtor at
the address of Debtor designated herein (subject to Debtor's right to change
notice of address pursuant to the provisions of this Agreement) and debtor shall
be conclusively deemed to have received any notice so deposited. In lieu of
deposit of any notice in the United States mail, Secured Party may personally
deliver such notice to Debtor.
G. The terms and provisions of this Security Agreement may not be altered,
amended or modified unless a written instrument has been executed by Debtor and
Secured Party, which instrument specifically refers to this Security Agreement
and which instrument clearly indicates that it is intended to alter, amend or
modify this Agreement.
H. This Security Agreement and the security interest herein granted are
given in addition to, and not in substitution of or in lieu of any prior or
contemporaneous Security Agreement, security interest, pledges or assignments
given by Secured Party to Debtor, or a person designated by Debtor. All powers,
rights and remedies of Secured Party in any other such Security Agreement are
deemed to be cumulative with the powers, rights and remedies of Secured Party as
set forth herein.
I. If any provision of this Security Agreement should be found, for any
reason, to be invalid or unenforceable under the laws of the State of Texas, or
any other state or governmental unenforceable provision shall be deleted from
the provisions of this Agreement and this Agreement shall be, thereafter,
construed and enforced without consideration of such invalid or unenforceable
provision.
3. This Security Agreement may be executed in any number of counterparts,
all of which together shall constitute one and the same instrument. Debtor
agrees and consents that any photocopy or other reproduction of any Financing
Statement executed by Debtor is sufficient to constitute a valid and enforceable
Financing Statement for all purposes, without limitation, for filing in any
jurisdiction where the filing of such copy shall be permitted by the provisions
of the Uniform Commercial Code of such jurisdiction.
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K. The parties agree that time is of the essence to each of the provisions
of this Security Agreement.
L. The Exploration Agreement, as defined on Exhibit "A,11 requires the
approval of Zydeco Exploration, Inc. to any pledge or sale of an interest in the
Exploration Agreement or the seismic data and permits, options to lease, and
leases described on Exhibit "A," Accordingly, notwithstanding anything herein to
the contrary, Debtor makes no representation or warranty that the consent of
Zydeco Exploration, Inc. is not required to effect the lien granted hereby.
State of Texas
County of Xxxxxx (S)
This instrument was acknowledged before me on July 31, 1997, by Xxxxxx X.
Xxxxxxxx, Vice Chairman of Cheniere Energy Operating Co., Inc., a Delaware
corporation, on behalf of said corporation.
Notary Public in and for
the State of Texas
State of Texas
County of Xxxxxx
This instrument was acknowledged before me on July 31, 1997, by Xxx Xxxxx.
Notary Public in and for
the State of Texas
EXECUTED this the 31st day of July, 1997.
DEBTOR:
CHENIERE ENERGY OPERATING CO., INC.
By: Xxxxxx X. Xxxxxxxx Vice Chairman
SECURED PARTY
Xxx Xxxxx
Exhibit "A"
Collateral
Reference is made to that certain Exploration Agreement dated April 4, 1996,
between FX Energy, Inc. and Zydeco Exploration, Inc., as amended by that certain
First Amendment dated May 15, 1996,
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and that certain Second Amendment dated August 5, 1996, and that certain Third
Amendment dated October 31, 1996, and that certain Fourth Amendment dated as of
November 27, 1996, and that certain Fifth Amendment dated as of April 28, 1997,
and that certain Sixth Amendment dated as of July 18, 1997 (as amended, the
"Exploration Agreement"), as well as including permits, options to lease, and
oil & gas leases acquired thereunder (collectively, the "Leases").
As the Collateral in the foregoing agreement, Debtor pledges:
(A) An undivided 1.8519% interest in seismic data acquired pursuant to the
Exploration Agreement under that certain Master Geophysical Data
Acquisition Agreement between Zydeco Exploration, Inc. and Grant
Geophysical, Inc. dated June 12, 1996 and that certain Master
Geophysical Data Acquisition Agreement with Supplemental Agreement No.1,
both dated March 14, 1997, under which Master Geophysical Data
Acquisition Agreements was acquired in the area of Cameron Parish
depicted on Appendix "A" hereto, including, without limitation, seismic
data acquired under such contracts including:
i. Final survey and support data including all control points.
ii. Final observer's (OB) notes and drill logs.
iii. Base maps showing:
(1) all swaths (shot and receiver lines) used in processing.
(2) offset limited fold plots.
(3) post-processing grid.
iv. SEGY 9-track tape copies of:
(1)
(2)
(3)
v. Diskettes containing the following information in ASCII format:
(1) DM0 Velocities.
(2) Migration Velocities.
(3) X-Y Control points for binning grid.
vi. field reels and support data
vii. pre-stack processing reels and support data
viii. prints and/or films containing portions of the data
(II) An undivided 1.8519% interest in the Leases; and
(III) An undivided 3.7038% interest in proceeds from the marketing of seismic
data under Section 15b) of the Exploration Agreement.
The interests so pledge are subject to the Exploration Agreement.
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