EXHIBIT 10.41
SECURITY AGREEMENT
(Stock Pledge)
BY
HOWELL CORPORATION
IN FAVOR OF
BANK ONE, TEXAS, NATIONAL ASSOCIATION
February 1, 1995
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LETTER OF CREDIT FACILITY TO HOWELL CRUDE OIL COMPANY
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INTERPRETATION 1
1.1 Terms Defined Above 1
1.2 Terms Defined in Credit Agreement 2
1.3 Additional Defined Terms 2
1.4 Undefined Financial Accounting Terms 2
1.5 Terms Defined in Texas Business and Commerce
Code 2
1.6 References. 2
1.7 Articles and Sections 2
1.8 Number and Gender 3
ARTICLE 2 SECURITY INTEREST 3
2.1 Grant of Security Interest in Collateral 3
2.2 Delivery of Securities 3
2.3 Power of Attorney 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES 5
3.1 Status of Securities 5
3.2 No Material Misstatements 5
3.3 Ownership and Liens 5
ARTICLE 4 COVENANTS AND AGREEMENTS 5
4.1 Payment of Assessments and Charges 5
4.2 Delivery of Collateral 6
4.3 Further Assurances 6
4.4 Prohibited Liens and Filings 6
ARTICLE 5 RIGHTS AND REMEDIES 6
5.1 Remedies Upon Default 6
5.2 Voting Rights, Dividends, Etc. Prior to Default 7
5.3 Voting Rights, Dividends, Etc. After Default 8
5.4 Proceeds 9
5.5 Lender Duties 9
5.6 The Lender's Actions 9
ARTICLE 6 MISCELLANEOUS 10
6.1 Transfer of Obligations and Collateral 10
6.2 Cumulative Security 10
6.3 Continuing Agreement 10
6.4 Cumulative Rights 11
6.5 Exercise of Rights 11
6.6 Remedy and Waiver 11
6.7 Non-Judicial Remedies 11
6.8 Preservation of Liability 11
6.9 Notices and Other Communications 11
6.10 Parties in Interest 12
6.11 Amendment and Waiver 12
6.12 Invalidity 12
6.13 GOVERNING LAW 12
6.14 JURISDICTION AND VENUE 13
6.15 WAIVER OF RIGHTS TO JURY TRIAL 13
6.16 ENTIRE AGREEMENT 13
SECURITY AGREEMENT
(Stock Pledge)
THIS SECURITY AGREEMENT (this "Security Agreement") dated as of the
1st day of February, 1995, is entered into between HOWELL CORPORATION, a
Delaware corporation (the "Pledgor"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION,
a national banking association (the "Lender").
W I T N E S S E T H :
WHEREAS, pursuant to the terms and conditions of the Credit Agreement
dated December 23, 1994, by and between Howell Crude Oil Company, a Delaware
corporation (the "Corporation"), and the Lender (as such agreement may be
amended, restated, or supplemented from time to time, the "Credit Agreement"),
the Lender has agreed to issue letters of credit for the account of the
Corporation;
WHEREAS, the Pledgor is the owner of the shares of issued and
outstanding common stock described in Schedule I hereof (the "Securities")
issued by the Corporation;
WHEREAS, the Pledgor, as the shareholder of the Corporation, will
derive substantial direct and indirect benefits from the extension of credit by
the Lender to the Corporation; and
WHEREAS, pursuant to the terms of the Credit Agreement and as an
inducement to the Lender to issue letters of credit for the account of the
Corporation pursuant to the Credit Agreement, the Pledgor has agreed to execute
this Security Agreement in favor of the Lender;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby agrees with the Lender as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Terms Defined Above. As used in this Security Agreement, the
terms "Corporation," "Credit Agreement," "Lender," "Pledgor," "Securities," and
"Security Agreement" will have the meanings indicated above.
1.2 Terms Defined in Credit Agreement. Each capitalized term used
but not defined herein shall have the meaning assigned to such term in the
Credit Agreement.
1.3 Additional Defined Terms. As used in this Security Agreement,
the following terms will have the meanings indicated:
(a) "Collateral" will mean the Securities and the certificates
representing the Securities; all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Securities, including, without limitation, all
additional shares of stock of the Corporation from time to time acquired by the
Pledgor by way of stock dividend or stock split; the certificates representing
such additional shares; all dividends, cash, instruments or other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares; and all proceeds of any of
the foregoing in this definition.
(b) "Event of Default" shall mean any Event of Default, as defined in
the Credit Agreement, or the failure of the Pledgor to comply with Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System, as
amended.
1.4 Undefined Financial Accounting Terms. Undefined financial
accounting terms used in this Security Agreement shall have the meanings
assigned to such terms according to GAAP.
1.5 Terms Defined in Texas Business and Commerce Code. Any term used
herein that is defined in the Texas Business and Commerce Code shall have the
meaning assigned to such term therein, unless the context otherwise requires or
such term is otherwise defined herein.
1.6 References. The words "hereby," "herein," "hereinabove,"
"hereinafter," "hereinbelow," "hereof," "hereunder," and words of similar import
when used in this Security Agreement shall refer to this Security Agreement as a
whole and not to any particular Article, Section, or provision of this Security
Agreement. References in this Security Agreement to Article or Section numbers
are to such Articles or Sections of this Security Agreement unless otherwise
specified.
1.7 Articles and Sections. This Security Agreement, for convenience
only, has been divided into Articles and Sections; and it is understood that the
rights and other legal relations of the parties hereto shall be determined from
this instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.
1.8 Number and Gender. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural; and
likewise, the plural shall be understood to include the singular. Words
denoting sex shall be construed to include the masculine, feminine and neuter,
when such construction is appropriate; and specific enumeration shall not
exclude the general but shall be construed as cumulative. Definitions of terms
defined in the singular or plural shall be equally applicable to the plural or
singular, as the case may be, unless otherwise indicated.
ARTICLE 2
SECURITY INTEREST
2.1 Grant of Security Interest in Collateral. The Pledgor, for value
received, the receipt and sufficiency of which are hereby acknowledged, and to
induce the Lender to issue Letters of Credit for the benefit of the Corporation,
hereby pledges to the Lender and hereby grants to the Lender a first lien on and
a security interest in the Collateral to secure the Obligations.
2.2 Delivery of Securities. All certificates or instruments
representing or evidencing the Securities shall be delivered to and held by the
Lender for the sole purpose of possession of the Collateral or any portion
thereof pursuant to this Security Agreement, and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Lender. The Lender shall at all times have actual possession of the Securities
and shall be deemed to have possession of any of the Collateral in transit to it
or set apart for it.
2.3 Power of Attorney. The Pledgor hereby irrevocably constitutes
and appoints the Lender and any authorized officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Pledgor and in the
name of the Pledgor or in its own name, from time to time in the Lender's
discretion, for the purpose of carrying out the terms of this Security
Agreement, and without notice to the Pledgor, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security Agreement,
including, without limitation, the following:
(a) upon the occurrence and during the continuance of any Event of
Default, to transfer to or register any or all of the Collateral in the name of
the Lender or any of its nominees;
(b) to exchange the certificates or instruments representing or
evidencing the Collateral for certificates or instruments of smaller or larger
denominations;
(c) upon the occurrence and during the continuance of any Event of
Default, (i) to receive payment of and receipt for any and all moneys, claims
and other amounts due and to become due at any time in respect of or arising out
of any Collateral, (ii) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right in
respect of any Collateral, (iii) to defend any suit, action or proceeding
brought against the Pledgor with respect to any Collateral, (iv) to settle,
compromise or adjust any suit, action or proceeding described above and, in
connection therewith, to give such discharges or releases as the Lender may deem
appropriate, and (v) to complete any blanks contained in any instruments of
transfer or assignment appended to or delivered with the certificates
representing the Securities; and
(d) to exchange any of the Collateral for other property upon
reorganization, recapitalization or other readjustment of the Corporation, and
in connection therewith to deposit any of the Collateral with any committee or
depository upon such terms as the Lender may determine; and, subsequent to any
Event of Default, to exercise, at the option of the Lender, voting rights as to
any of the Collateral;
all without notice and without liability except to account for property actually
received by the Lender.
The Pledgor hereby ratifies all that said attorney shall lawfully do
or cause to be done within the scope of the power of attorney granted hereunder.
This power of attorney is a power coupled with an interest and shall be
irrevocable so long as any Obligation remains outstanding or any Commitment
exists. The powers conferred on the Lender hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. The Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act, except for gross negligence.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into the Credit Agreement and issue
Letters of Credit for the account of the Corporation, the Pledgor represents and
warrants to the Lender (which representations and warranties shall survive the
delivery of this Security Agreement and the other Loan Documents) that:
3.1 Status of Securities. All signatures on the Securities are
genuine or authorized; the transfer of the Securities by the Pledgor to the
Lender is effective; the Pledgor knows of no fact that might impair the validity
of the Securities; and the Securities (a) have been duly authorized, validly
issued, drawn, made, and/or accepted, (b) are genuine, validly outstanding,
fully paid, and nonassessable, (c) were not issued in violation of the
preemptive rights of any Person or any agreement by which the Pledgor or any
issuer of such Collateral is bound, and (d) have not been materially altered.
3.2 No Material Misstatements. No information, exhibit, or report
furnished by the Pledgor to the Lender in connection with the negotiation of any
Loan Document contained or contains any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein, in light of the circumstances in which they were made, not misleading.
3.3 Ownership and Liens. Except for the security interest of the
Lender, the Pledgor owns (and at the time of transfer or delivery of the
Collateral to the Lender owned or will own) good and indefeasible title to the
Collateral free and clear of any other security interests, liens, adverse
claims, or options; the Pledgor has (and at the time of transfer or delivery of
the Collateral to the Lender had or will have) full right, power, and authority
to convey, assign, transfer, and deliver the Collateral to the Lender and to
grant a security interest in the Collateral to the Lender in the manner provided
herein.
ARTICLE 4
COVENANTS AND AGREEMENTS
Unless agreed in writing by the Lender to the contrary, the Pledgor
agrees, so long as any Obligation remains outstanding or unpaid or any
Commitment exists:
4.1 Payment of Assessments and Charges. To pay all taxes, charges,
liens and assessments against the Collateral; and upon the failure of the
Pledgor to do so, the Lender at its option may, but will not be obligated to,
pay any of them.
4.2 Delivery of Collateral. That any and all
(i) dividends paid or payable other than in cash and all instruments
and other property received, receivable or otherwise distributed in respect of
or in exchange for any Collateral,
(ii) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in surplus, and
(iii) cash paid, payable or otherwise distributed in respect of
principal of, in redemption of or in exchange for any Collateral,
shall be forthwith delivered to the Lender to hold as Collateral for the benefit
of the Lender and shall, if received by the Pledgor, be received in trust for
the benefit of the Lender, be segregated from the other property or funds of the
Pledgor, and be forthwith delivered to the Lender as Collateral in the same form
as so received (with any necessary endorsement).
4.3 Further Assurances. To promptly cure any defects in the
execution and delivery of any of the Loan Documents executed by the Pledgor and
execute, acknowledge, and deliver such other assurances and instruments and take
such other action as shall, in the opinion of the Lender, be necessary to
fulfill the terms of the Loan Documents executed by the Pledgor and to confirm,
perfect, and preserve the security interest created and intended to be created
hereby and to vest more completely in and assure to the Lender its rights under
this Security Agreement.
4.4 Prohibited Liens and Filings. That it will not pledge, mortgage,
or otherwise encumber, create, or suffer a security interest to exist in any of
the Collateral (other than in favor of the Lender) or sell, assign, or otherwise
transfer any of the Collateral to anyone other than the Lender or file or permit
to be filed any financing statement or other security instrument with respect to
the Collateral other than in favor of the Lender.
ARTICLE 5
RIGHTS AND REMEDIES
5.1 Remedies Upon Default. (a) Upon the occurrence and during the
continuance of an Event of Default, the Lender may, at its option, declare all
Obligations immediately due and payable, without presentment, demand, protest,
notice of protest, default or dishonor, notice of intent to accelerate maturity,
notice of acceleration of maturity or other notice of any kind, all of which are
hereby expressly waived by the Pledgor, and may exercise any and all other
remedies provided by law or pursuant to the Loan Documents.
(b) If all or any part of the Obligations shall become due and
payable, the Lender may then, or at any time thereafter, apply, set-off,
collect, sell in one or more sales, 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 the Lender may elect. Any such sale
may be made either at public or private sale at the place of business of the
Lender, any brokers' board or securities exchange or elsewhere, either for cash
or upon credit or for future delivery, at such price as the Lender may deem
fair. The Lender 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 the Pledgor or
right of redemption. No such purchase or holding by the Lender shall be deemed
a retention by the Lender in satisfaction of the 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 Uniform Commercial Code or other law requires the Lender to give
reasonable notice of any such sale or disposition or other action, ten days'
prior written notice shall constitute reasonable notice. The Lender may require
the Pledgor to assemble the Collateral and make it available to the Lender at a
place designated by the Lender that is reasonably convenient to the Lender and
the Pledgor. Any sale hereunder may be conducted by an auctioneer or any
officer or agent of the Lender.
(c) In connection with the sale of Collateral which is stock or other
investment securities, the Lender must limit prospective purchasers to the
extent deemed necessary or advisable by the Lender to render such sale exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), and any applicable state securities laws. No sale so made in good
faith by the Lender shall be deemed not to be "commercially reasonable" because
so made; provided, however, that nothing in this Security Agreement shall be
deemed to impose any obligation whatsoever to file a registration statement
under the Act or any state securities law with respect to any sale of Collateral
by the Lender.
5.2 Voting Rights, Dividends, Etc. Prior to Default.
So long as no Event of Default shall have occurred and be continuing:
(a) the Pledgor will be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Security Agreement;
(b) subject to the further provisions of this Security Agreement, the
Pledgor shall be entitled to receive and retain any and all dividends paid in
respect of the Collateral; provided, however, that any and all
(i) dividends paid or payable other than in cash and all
instruments and other Property received, receivable, or otherwise distributed in
respect of or in exchange for any Collateral,
(ii) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in surplus, and
(iii) cash paid, payable or otherwise distributed in respect of
principal of, in redemption of or in exchange for any Collateral,
shall be forthwith delivered to the Lender to hold as Collateral for the
benefit of the Lender and shall, if received by the Pledgor, be received in
trust for the benefit of the Lender, be segregated from the other property or
funds of the Pledgor, and be forthwith delivered to the Lender as Collateral in
the same form as so received (with any necessary endorsement); and
(c) the Lender shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the Pledgor
may reasonably request for the purpose of enabling the Pledgor to exercise the
voting and other rights which it is entitled to exercise pursuant to Section
5.2(a) above and to receive the dividends which it is authorized to receive and
retain.
5.3 Voting Rights, Dividends, Etc. After Default. Upon the
occurrence and during the continuance of an Event of Default:
(a) at the option of the Lender with notice to the Pledgor, all
rights of the Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 5.2(a) above and
to receive the dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 5.2(b) above shall cease
and shall thereupon become vested in the Lender, who shall thereupon have the
sole right to exercise such voting and other consensual rights and to receive
and hold as Collateral such dividends; and
(b) all dividends which are received by the Pledgor contrary to the
provisions of Section 5.3(a) above shall be received in trust for the benefit of
the Lender, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Lender as Collateral in the same form as so received
(with any necessary endorsement).
5.4 Proceeds. Prior to all or any part of the Obligations becoming
due and payable as specified in Section 5.1, all cash sums or other property
received by the Lender on account of the Collateral shall be held as Collateral.
After all or any part of the Obligations shall become due and payable as
specified in Section 5.1, the proceeds of any sale or other disposition of the
Collateral and all sums received or collected by the Lender from or on account
of the Collateral shall be applied by the Lender in the manner set forth in
9.504 of the UCC.
5.5 Lender Duties. The Lender 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 Obligations, or to take any steps
necessary to preserve any rights against prior parties. The Lender shall not be
liable for failure to collect or realize upon any or all of the Obligations or
Collateral, or for any delay in so doing, nor shall the Lender be under any duty
to take any action whatsoever with regard thereto. The Lender shall use
reasonable care in the custody and preservation of any Collateral in its posses
sion. The Lender 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 the Lender's rights in or to, any of the
Collateral.
5.6 The Lender's Actions. The Pledgor waives any right to require
the Lender to proceed against any person, exhaust any collateral or pursue any
other remedy in the Lender's power; waives any and all notice of acceptance of
this Security Agreement or of creation, modification, renewal, or extension for
any period of any Obligations; and waives any defense arising by reason of any
disability or other defense of the Corporation or any other guarantor or Person
primarily or secondarily liable with respect to all or any portion of the
Obligations ("Other Liable Party"), or by reason of the cessation from any cause
whatsoever of the liability of the Corporation or any Other Liable Party. All
dealings between the Corporation or the Pledgor and the Lender shall
conclusively be presumed to have been had or consummated in reliance upon this
Security Agreement. Until all Obligations shall have been paid and/or performed
in full and the Commitment shall have terminated, the Pledgor (i) shall have no
right to subrogation, (ii) waives any right to enforce any remedy that the
Lender now has or may hereafter have against the Corporation or any Other Liable
Party, and (iii) except as otherwise expressly provided in this Security
Agreement, waives any benefit of and right to participate in any collateral or
security whatsoever now or hereafter held by the Lender.
ARTICLE 6
MISCELLANEOUS
6.1 Transfer of Obligations and Collateral. Subject to the terms of
the Credit Agreement, the Pledgor hereby agrees that the Lender may transfer any
or all of the Obligations. Upon any such transfer, the Lender 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 the Lender hereunder
with respect to Collateral so transferred. With respect to any Collateral not
so transferred, the Lender shall retain all rights, powers, and remedies hereby
given. The Lender may at any time deliver any or all of the Collateral to the
Pledgor, whose receipt shall be a complete and full acquittance for the Collat
eral so delivered, and the Lender shall thereafter be discharged from any
liability therefor.
6.2 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 payment of the Obligations. No security taken hereafter
as security for payment of all or any portion of the 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.
6.3 Continuing Agreement. This is a continuing agreement and the
conveyance hereunder shall remain in full force and effect and all the rights,
powers, and remedies of the Lender hereunder shall continue to exist until the
Obligations shall be paid in full as the same become due and payable, the
Commitment has terminated, and the Lender, upon request of the Pledgor, has
executed a written termination statement, reassigned to the Pledgor, without
recourse, the Collateral and all rights and liens conveyed hereby and returned
possession of the Collateral to the Pledgor. Furthermore, it is contemplated by
the parties hereto that there may be times when no Obligations shall be owing.
Notwithstanding such occurrences, this Security Agreement shall remain valid and
shall be in full force and effect as to subsequent Obligations provided that the
Lender has not executed a written termination statement and returned possession
of the Collateral to the Pledgor. Otherwise, this Security Agreement shall
continue irrespective of the fact that the liability of the Corporation or any
Other Liable Party may have ceased and notwithstanding the death or incapacity
of the Pledgor or any Other Liable Party or any other event or proceeding
affecting the Corporation, the Pledgor, and/or any Other Liable Party.
6.4 Cumulative Rights. The rights, powers, and remedies of the
Lender 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 the Lender. The Lender
shall have the rights, powers, and remedies of a secured party under the Texas
Business and Commerce Code, as amended.
6.5 Exercise of Rights. Time shall be of the essence for the
performance of any act under this Security Agreement by the Pledgor, but neither
the Lender's acceptance of partial or delinquent payments nor any forbearance,
failure, or delay by the Lender in exercising any right, power or remedy shall
be deemed a waiver of any obligation of the Pledgor, the Corporation, or any
Other Liable Party or of any right, power, or remedy of the Lender 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.
6.6 Remedy and Waiver. The Lender may remedy or waive any default
without waiving the default remedied or waiving any prior or subsequent default.
6.7 Non-Judicial Remedies. The Lender may enforce its rights
hereunder without prior judicial process or judicial hearing. The Pledgor
expressly waives, renounces, and knowingly relinquishes any and all legal rights
which might otherwise require the Lender to enforce its rights by judicial
process. In so providing for non-judicial remedies, the Pledgor 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 the Lender or the Pledgor from
resorting to judicial process at such party's option.
6.8 Preservation of Liability. Neither this Security Agreement nor
the exercise by the Lender of (or the failure to so exercise) any right, power,
or remedy conferred herein or by law shall be construed as relieving the Pledgor
or any Other Liable Party from full liability thereon and for any deficiency
thereon.
6.9 Notices and Other Communications. Except as to verbal notices
expressly authorized herein, which verbal notices shall be confirmed in writing,
all notices, requests, and communications hereunder shall be in writing
(including by telecopy). Unless otherwise expressly provided herein, any such
notice, request, demand, or other communication shall be deemed to have been
duly given or made when delivered by hand, or, in the case of delivery by mail,
when deposited in the mail, certified mail, return receipt requested, postage
prepaid, or, in the case of telecopy notice, when receipt thereof is
acknowledged orally or by written confirmation report, addressed as follows:
(a) if to the Lender, to:
Bank One, Texas, National Association
910 Travis
Houston, Texas 77002
Attention: Energy Group
(or for notice by mail, to:
P. O. Box 2629
Houston, Texas 77252-2629
Attention: Energy Group)
Telecopy: (713) 751-3544
(b) if to the Pledgor, to:
Howell Corporation
1111 Fannin, Suite 1500
Houston, Texas 77002
Attention: Allyn Skelton
Telecopy: (713) 658-4007
Any party may, by proper written notice hereunder to the others,
change the individuals or addresses to which such notices to it shall thereafter
be sent.
6.10 Parties in Interest. All covenants and agreements herein
contained by or on behalf of the Pledgor or the Lender shall be binding upon and
inure to the benefit of the Pledgor or the Lender, as the case may be, and their
respective legal representatives, successors, and assigns.
6.11 Amendment and Waiver. This Security Agreement may not be amended
nor may any of its terms be waived except in writing duly signed by the party
against whom enforcement of the amendment or waiver is sought.
6.12 Invalidity. If any provision of this Security Agreement is
rendered or declared illegal, invalid, or unenforceable by reason of any
existing or subsequently enacted legislation or by a judicial decision that has
become final, the Pledgor and the Lender shall promptly meet and negotiate
substitute provisions for those rendered illegal, invalid, or unenforceable, but
all of the remaining provisions shall remain in full force and effect.
6.13 GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF
RELATING TO CONFLICTS OF LAW, PROVIDED, HOWEVER, THAT VERNON'S TEXAS CIVIL
STATUTES, ARTICLE 5069, CHAPTER 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT
LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY.
6.14 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT
TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR
FROM THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH THE PLEDGOR IS
A PARTY MAY BE LITIGATED, AT THE SOLE DISCRETION AND ELECTION OF THE LENDER, IN
COURTS HAVING SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. THE PLEDGOR HEREBY
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN
HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE LENDER IN ACCORDANCE WITH THIS SECTION.
6.15 WAIVER OF RIGHTS TO JURY TRIAL. THE PLEDGOR AND THE LENDER
HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, IRREVOCABLY, AND UNCONDITIONALLY
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, COUNTERCLAIM,
OR OTHER LITIGATION THAT RELATES TO OR ARISES OUT OF ANY OF THIS SECURITY
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTS OR OMISSIONS OF THE LENDER IN
THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS SECURITY AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF
THIS SECTION ARE A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THE CREDIT
AGREEMENT.
6.16 ENTIRE AGREEMENT. THIS SECURITY AGREEMENT CONSTITUTES THE
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF
AND SHALL SUPERSEDE ANY PRIOR AGREEMENTS, WHETHER WRITTEN OR ORAL, BETWEEN THE
PARTIES HERETO RELATING TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD,
THIS SECURITY AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH
PARTIES.
IN WITNESS WHEREOF, this Security Agreement is executed as of the date
first above written.
DEBTOR
HOWELL CORPORATION
By: /s/ Paul W. Funkhouser
Printed Name: Paul W. Funkhouser
Title: President
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By: /s/ Stephen M. Smith
Stephen M. Smith
Vice President
SCHEDULE I
Stock Number
Stock Class of Certificate Par of
Issuer Stock No. Value Shares
Howell Crude Common No. 1 1.00 1,000
Oil Company