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EXHIBIT 10.4
MORTGAGE * UNITED STATES OF AMERICA
*
BY * STATE OF TEXAS
*
FISHING TOOLS, INC. * COUNTY OF HARRIS
BE IT KNOWN, that on this 17th day of February, 1999,
BEFORE ME, Deborah S. Hudgeons, a Notary Public, duly commissioned and
qualified in and for the aforesaid State and County, and in the presence of the
undersigned, competent witnesses, personally came and appeared:
FISHING TOOLS, INC., a corporation organized under the laws of the State
of Louisiana, whose mailing address is 5005 Riverway Drive, #550,
Houston, Texas 77056, whose Employer Identification Number is
72-0461244, herein represented by Eugene L. Butler, its President, duly
authorized per resolutions adopted by the Board of Directors of said
corporation, a certified copy of which is annexed hereto (hereinafter
referred to as "Mortgagor").
Mortgagor declares and acknowledges that PONDER INDUSTRIES, INC. is
justly and truly indebted unto WHITE OWL INVESTORS L.L.C. ("Mortgagee") in the
principal sum of ONE HUNDRED THOUSAND AND NO/100 ($100,000.00) DOLLARS, as
evidenced by that certain promissory note (the "Note") for the said sum of One
Hundred Thousand and No/100 ($100,000.00) Dollars, payable to the order of
White Owl Investors L.L.C., with interest from date until paid at a rate equal
to the lesser of (a) ten (10%) percent per annum or (b) the Maximum Rate (as
defined therein) from time to time in effect, having a maturity date of June
15, 1999, together with interest, attorney's fees, insurance premiums, taxes,
collection costs, keeper fees, and all other costs as provided in this
mortgage, if any should accrue.
And now, in order to secure the full, complete, proper, and timely
payment, observance and performance of any and all present and future
liabilities, obligations, covenants, conditions, agreements and stipulations of
every nature and kind, direct or indirect, contingent or otherwise, by
Mortgagor and/or Ponder Industries, Inc. to Mortgagee, including but not
limited to the Note and any and all insurance premiums, taxes, keeper's fees,
and the performance of all obligations of Mortgagor under this mortgage; all
together with interest, attorneys' fees (Mortgagor agreeing that if the Note is
referred to an attorney-at-law to institute legal proceedings to recover all or
any part of the principal or interest on the Note, to protect interests of the
holder or holders of the Note, or for collection, compromise, or other action,
Mortgagor hereby agrees to pay the fee of the attorney who may be employed for
that purpose, which fee is hereby fixed at twenty (20%) percent of the amount
due, sued for, claimed, or sought to be protected, preserved or enforced) and
collection costs (collectively, the "Obligations"), Mortgagor specially
mortgages, pledges, assigns, affects, grants a security interest in, and
hypothecates in favor of Mortgagee, the following (collectively, the "Mortgaged
Property"):
(1) FIVE CERTAIN LOTS OF GROUND, together with all the buildings and
improvements thereon, and all the rights, ways, privileges,
servitudes, advantages and appurtenances thereunto belonging or
in anywise appertaining, situated, lying and being in the VILLAGE
OF MARRERO, PARISH OF JEFFERSON, STATE OF LOUISIANA, in MARRERO
INDUSTRIAL SUBDIVISION, SECTION "A", designated as LOTS NOS. 64,
65, 66, 67 AND 68, which lots adjoin each other and measure each
100 feet front on MacArthur Avenue, same in width in the rear, by
a depth of 435.60 feet between equal and parallel lines. All in
accordance with a survey made by Guy J. Seghers, C.E., dated July
20, 1956, revised April 19, 1957, and June 30, 1960, approved by
the Jefferson Parish Council by Ordinance No. 4654, recorded in
COB 512, folio 652 of the records of Jefferson Parish.
All in accordance with survey by Joseph L. Kreller, Jr., C.E.,
dated April 15, 1989.
Lots 64 and 65 being the same property acquired by Fishing Tools,
Inc. from Marrero Land and Improvement Association, Limited, per
act dated July 9, 1969, executed before Louis H. Marrero, Notary
Public, registered in COB 700, folio 932, Parish of Jefferson.
Lot 66 being the same property acquired by J & V Tool & Equipment
Co. Inc. from Marrero Land and Improvement Association, Limited,
per act dated January 12, 1961, executed before Maurice J. Pitre,
Notary Public, registered in COB 522, folio 507, Parish of
Jefferson.
Lots 67 and 68 being the same property acquired by J & V Tool &
Equipment Co. Inc. from Marrero Land and Improvement Association,
Limited, per act dated January 12, 1961, executed before Maurice
J. Pitre, Notary Public, registered in COB 522, folio 505, Parish
of Jefferson.
(The above described immovable property is collectively referred
to herein as the "Premises");
Together with all buildings, constructions, and improvements now
or hereafter existing on the Premises, all other component parts
of the Premises, all component parts of the buildings,
constructions, and improvements now or hereafter on the Premises,
all appurtenances, attachments, rights, ways, privileges,
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servitudes, advantages, batture and batture rights belonging or
in any wise appertaining to the Premises, affecting the Premises,
or now or hereafter forming part of, attached to, or connected
with the Premises or used in connection with the Premises.
To the extent any of the following may be applicable, this act is
made and accepted subject to the following:
a. Reservation of mineral rights, with waiver of surface
rights, as contained in Sale by Marrero Land & Improvement
Association, Limited, dated July 9, 1969, recorded in COB
700, folio 932.
b. Reservation of mineral rights, with no waiver of surface
rights, as contained in Sale by Marrero Land & Improvement
Association, Limited, dated January 12, 1961, recorded in
COB 522, folio 507, and COB 522, folio 505.
c. Right of way in favor of United Gas Pipe Line Company and
Interstate National Gas Company, recorded in COB 245, folio
342.
d. Right of way in favor of United Gas Pipe Line Company and
Interstate National Gas Company, recorded in COB 245, folio
344.
e. Right of way in favor of Louisiana Power & Light Company,
recorded in COB 107, folio 178.
The parties hereto declare that they do not hereby intend, by the
execution of these presents, to interrupt, or suspend, the
running of any prescription or peremption which has run or may
run in connection with the foregoing, nor do the parties intend
to revive, establish or initiate any one or more of the foregoing
which may not now or hereafter be binding upon the hereinabove
described property and/or the parties hereto.
(2) All present and future rents, fruits, revenues, income and
profits accruing from time to time from the use, possession,
occupancy or lease of all or any part of the Premises and from
Mortgagor's operation thereof including, without limitation,
rights to rents, royalties, rentals, shut in payments and other
payments which are rents or rentals attributable to Mortgagor's
sale, lease or other disposition of his right to explore or
develop mineral interests in the Premises (collectively, the
"Rents"), and all present and future leases of all or any part of
the Premises ("Leases"); and
(3) All incorporeal rights incidental or accessory to the Premises or
its use (the "Incorporeal Rights"), including without limitation
(i) the right to receive proceeds and awards from the sale,
lease, insurance loss, claims for damages, or condemnation,
expropriation or other taking of the Premises (the "Proceeds");
(ii) rights under service, maintenance, or warranty contracts
relating to the Premises; and (iii) rights under trade names,
patents, or copyrights that are subject to use in connection with
the Premises or Mortgagor's business or other activities
conducted thereon.
1. Covenants. 1.1 The Mortgaged Property shall remain specially
mortgaged, pledged, affected and hypothecated to, and subject to a security
interest in favor of, Mortgagee until the full and final payment, observance
and performance of the Obligations and cancellation of this Mortgage from the
public records. Mortgagor shall not sell, transfer, mortgage, assign, pledge,
alienate or create any security interest in the Mortgaged Property. In no event
shall any such act by Mortgagor, whether or not authorized by Mortgagee,
prejudice the rights of Mortgagee under this mortgage.
1.2. Mortgagor shall make all repairs, additions, and improvements
necessary to maintain the Mortgaged Property in good condition and to prevent
any impairment of the security of this mortgage. If Mortgagor fails to maintain
the Mortgaged Property in good condition, Mortgagee may, at its option, cause
the Mortgaged Property to be maintained in good condition at Mortgagor's cost.
1.3. (a) Mortgagor shall keep the Mortgaged Property constantly insured
against risk of loss by fire, wind, storm, flood, tornado, theft, and all such
other hazards, casualties, and contingencies as may be deemed necessary by
Mortgagee. The insurance shall be in such amounts and shall be issued by such
companies as are acceptable to Mortgagee. All policies of insurance shall be
delivered to Mortgagee, shall contain a loss payable clause in favor of
Mortgagee, and shall be in a form acceptable to Mortgagee. All renewal policies
shall be delivered to Mortgagee at least fifteen (15) days prior to the
expiration date of the existing policy.
(b) The insurance policies required by this mortgage shall
provide that any loss payable to Mortgagee and Mortgagor, as their respective
interests may appear, shall be payable to Mortgagee notwithstanding any act or
omission of Mortgagor or of any other party, which would otherwise result in a
forfeiture of such insurance, and that policies shall not be canceled even for
nonpayment of premium or the coverage reduced without at least thirty (30) days
prior written notice to Mortgagee.
(c) Mortgagor shall promptly notify Mortgagee of any insured
loss. If Mortgagee receives any sum of money from any insurance policy
affecting the Mortgaged Property, Mortgagee may, at its option and in such
manner
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as it may determine, (i) retain the money and apply it toward the payment,
observance and performance of any one or more of the Obligations, with
Mortgagee having the right to impute the money among the Obligations in any
manner specified by Mortgagee, or (ii) pay all or part of the money, under such
conditions as Mortgagee may determine, to Mortgagor to enable Mortgagor to
repair or restore the Mortgaged Property or use the money for any other purpose
satisfactory to Mortgagee, all without prejudice to, and without affecting the
lien of, this mortgage.
1.4. Mortgagor shall pay promptly when due all taxes, local and special
assessments, and governmental and utility charges (collectively, the "Taxes")
imposed, assessed, or levied on all or any part of the Mortgaged Property, and
Mortgagor shall furnish Mortgagee evidence of the payment of the Taxes. If
Mortgagor for any reason does not pay promptly when due any of the Taxes,
Mortgagee is hereby authorized to pay such unpaid Taxes with full subrogation
to all rights of all authorities imposing such Taxes by reason of Mortgagee's
payment, and Mortgagor shall promptly reimburse Mortgagee on demand for Taxes
paid by Mortgagee. Mortgagor shall, if requested by Mortgagee, pay to Mortgagee
an amount equal to the estimated annual Taxes and the premiums for the
insurance required by this Mortgage, so that Mortgagee shall have sufficient
funds available to pay such Taxes and insurance premiums, and Mortgagor shall,
at the option of Mortgagee, pay such amounts either thirty (30) days before
they become due, or in equal monthly payments in advance, with such payments
commencing one (1) month after the date of this mortgage.
1.5. Mortgagor shall pay promptly when due all of Mortgagor's
obligations that might, if unpaid, result in or permit the creation of a lien
or encumbrance on all or any part of the Mortgaged Property. Mortgagor shall do
everything necessary to preserve the priority of this mortgage without any
expense to Mortgagee. Mortgagor shall notify Mortgagee immediately if any lien
is filed against any part of the Mortgaged Property or if any part of the
Mortgaged Property is seized, attached, or levied against. Mortgagor shall
immediately obtain the release of the Mortgaged Property from any seizure,
lien, or attachment, and if Mortgagor fails to do so, Mortgagee may, at its
option, obtain the release of the Mortgaged Property at Mortgagor's expense.
1.6. (a) Mortgagor shall comply with all laws, ordinances, regulations,
covenants, conditions, and restrictions affecting the Mortgaged Property, its
use, construction, or maintenance, including, without limitation, all
Environmental Laws. As used in this Mortgage, "Environmental Laws" shall mean
any and all federal, state or local laws, rules, regulations, orders, permits,
or ordinances involving the environment including, but without limitation, the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9607 et seq., as amended by the Superfund Amendment and Reauthorization
Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613 (codified as amended in various
sections of 42 U.S.C.), the Hazardous Materials Transportation Act, Pub. L. No.
93-633, 88 Stat. 2156 (codified as amended in various sections of 46 U.S.C.);
the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., Article 2315.3 of the Louisiana Civil Code, Statewide Order 29-B
by Office of Conservation, Department of Natural Resources, State of Louisiana,
the Louisiana Abandoned Oilfield Waste State Law (La. R.S. 30:71, et seq.), and
the Louisiana Environmental Quality Act (La. R.S. 30:2001, et seq.) as they now
exist or may subsequently be modified, supplemented or amended. Mortgagor
warrants that neither Mortgagor, any occupant of the Mortgaged Property, or the
Mortgaged Property is in violation of or subject to any existing, pending, or
threatened investigation or inquiry by any governmental authority or to any
remedial obligations under any of the Environmental Laws.
(b) Mortgagor shall forever indemnify, defend and hold harmless
Mortgagee, its directors, officers, employees and agents from and against all
harms, including, without limitation, damages, punitive damages, liabilities,
losses, demands, claims, costs, recovery actions, lawsuits, administrative
proceedings, orders, response costs, compliance costs, investigation expenses,
consultant fees, attorneys' fees and litigation expenses arising from (i) the
operation of any of the Environmental Laws, and (ii) the violation by
Mortgagor, any occupant of the Mortgaged Property, or the Mortgaged Property of
any of the Environmental Laws. Mortgagor shall pay all costs and expenses
incurred by Mortgagee to enforce the provisions of this paragraph, including,
without limitation, attorneys' fees and litigation expenses. The provisions of
this paragraph shall survive the cancellation of this mortgage and shall remain
in full force and effect beyond the expiration of any applicable statute of
limitations and payment or satisfaction in full of any single claim of
Mortgagee within the scope of the provisions of this paragraph.
1.7. Mortgagor shall not remove any part of the Mortgaged Property from
its present location without Mortgagee's prior written consent.
1.8. Mortgagor shall permit Mortgagee and its agents to have access to,
and to inspect the Mortgaged Property at all reasonable times.
1.9. Mortgagor warrants that Mortgagor lawfully owns and possesses the
Mortgaged Property, that the Mortgaged Property is registered in Mortgagor's
name, that the Mortgaged Property has not been alienated by Mortgagor, and that
there are no mortgages, liens, judgments or encumbrances against the Mortgaged
Property unless specifically listed here:
a. Mortgage by Fishing Tools, Inc. in favor of Jefferson Guaranty
Bank in the amount of $1,500,000.00, dated April 21, 1998,
recorded in MOB 2511, folio 295.
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Mortgagor represents and warrants to Mortgagee that the obligations
secured by the $1,500,000.00 Mortgage has been fully paid or performed and that
Mortgagor will have the $1,500,000.00 Mortgage cancelled of record by not later
than February 28, 1999.
1.10. The maximum amount of the Obligations secured by this mortgage and
assignment of leases and rents shall not at any one time exceed One Hundred
Million ($100,000,000.00) Dollars. Mortgagee shall have full subrogation to
Mortgagor's rights to all Leases and Rents.
1.11 Mortgagor shall administer the Leases, Rents and Incorporeal Rights
in a fiduciary capacity for the benefit of Mortgagee. Although this instrument
creates a present pledge and assignment of and vested security right in the
Leases and Rents, Mortgagor shall be entitled to collect the Rents until the
occurrence of a Default or until Mortgagee sends written notice to Mortgagor at
Mortgagor's address set forth above, whereupon Mortgagee shall have the right
to receive and collect the Rents. All Proceeds shall be paid directly to
Mortgagee. Mortgagor hereby irrevocably appoints Mortgagee its agent and
attorney-in-fact (coupled with an interest), to demand, sue for, collect,
receive, and receipt for the Rents and Proceeds, and to exercise all the rights
and privileges of Mortgagor under any of the Leases or Incorporeal Rights
affecting the Mortgaged Property, including without limitation, the right to
fix or modify the amount of the Rents, to evict any lessee, tenant or occupant
(the "Lessee") from the Mortgaged Property, to relet such property and to do
all such things as Mortgagee may deem necessary. Mortgagor hereby irrevocably
consents that all Lessees of the Mortgaged Property shall be authorized to pay
the Rents directly to Mortgagee without liability for the determination of the
actual existence of any Default, the Lessees being hereby expressly relieved of
any obligation to Mortgagor with respect to Rents paid to Mortgagee. All Rents
and Proceeds collected under this mortgage shall be applied, after payment of
all costs and charges, as a credit against the Obligations. Mortgagee shall
have no legal or contractual responsibility for the condition of the Mortgaged
Property, for any obligation to perform leases affecting the Mortgaged
Property, or for any dangerous or defective condition of the Mortgaged
Property. Mortgagor indemnifies and shall defend the Mortgagee and its agents,
employees, successors, and assigns (the "Indemnified Parties") and to hold them
harmless from any cost, expense, liability, loss, or damage, including, without
limitation, reasonable attorneys' fees, which may or might be incurred by them
by reason of the assignment of and security interest in the Rents, Leases and
Incorporeal Rights. The obligation set forth herein to indemnify, defend, and
hold the Indemnified Parties harmless shall be secured by this mortgage.
1.12. Mortgagor hereby agrees to pay promptly all charges, costs, and
attorneys' fees incurred in connection with the preparation, execution, and
recordation of this mortgage.
1.13. If Mortgagor fails to perform any obligation under this mortgage,
then the Mortgagee may, at its option, perform such obligation, and the cost of
such performance shall be reimbursable to Mortgagee upon demand and added to
the amount secured by this mortgage, provided that the maximum amount to be
secured by this mortgage shall not, at any one time, exceed One Hundred Million
($100,000,000.00) Dollars. Authorizations granted to the Mortgagee to pay or
perform obligations on behalf of the Mortgagor, or to enforce or collect
Leases, Rents and Proceeds, are solely for the benefit of Mortgagee, to be
exercised in Mortgagee's sole discretion, and shall be performed at the sole
risk and expense of Mortgagor. Mortgagee shall have no liability to Mortgagor,
or any other party, either directly or by set-off or compensation, for failure
to perform such obligations or to enforce or collect Leases, Rents or Proceeds,
or for performing in a manner that causes damage to the Mortgagor.
2. Default and Remedies. 2.1. The occurrence of any one or more of the
following events shall constitute a default (a "Default") under this mortgage:
(a) failure to pay promptly on demand any principal or interest
due on the Note;
(b) failure to pay promptly on demand any sums advanced by
Mortgagee for the payment of insurance premiums, Taxes, the cost of maintaining
the Mortgaged Property in good repair, or the cost of obtaining the release of
the Mortgaged Property from any seizure, lien, or attachment;
(c) failure by Mortgagor to observe or perform any of Mortgagor's
covenants, agreements, and obligations under this mortgage;
(d) the inaccuracy of any warranty made by Mortgagor to Mortgagee
in this mortgage or otherwise; or
(e) the seizure, attachment or sequestration of any part of the
Mortgaged Property.
2.2. If a Default occurs, Mortgagee may, at Mortgagee's option, without
notice to Mortgagor, declare the Obligations to be immediately due and payable,
and may immediately exercise all remedies provided under this mortgage or by
law. For purposes of executory process, Mortgagor confesses judgment in favor
of Mortgagee for the full amount of the Obligations. Mortgagee may cause all or
any part of the Mortgaged Property to be seized and sold under executory or
other legal process without appraisement, which is hereby expressly waived, as
an entirety or in parcels, as Mortgagee may determine, to the highest bidder
for cash, or on such terms as are acceptable to Mortgagee.
2.3. To the extent permitted by law, Mortgagor hereby expressly waives
(a) the benefit of appraisement provided for in Articles 2332, 2336, 2723 and
2724, Louisiana Code of Civil Procedure, and all other laws conferring such
benefits; (b) the demand and three (3) days delay accorded by Articles 2639 and
2721, Louisiana Code of Civil
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Procedure; (c) the notice of seizure required by Articles 2293 and 2721,
Louisiana Code of Civil Procedure; (d) the three (3) days delay provided by
Articles 2331 and 2722, Louisiana Code of Civil Procedure; (e) the benefit of
the other provisions of Articles 2331, 2722, and 2723, Louisiana Code of Civil
Procedure; (f) the benefit of the provisions of any other articles of the
Louisiana Code of Civil Procedure not specifically mentioned above; (g) all
rights of division and discussion with respect to any Obligation; and (h) all
homestead and other exemptions relating to the Mortgaged Property.
2.4. In addition to all of the other rights and remedies of Mortgagee
under this mortgage, if a Default occurs, Mortgagee may, at Mortgagee's option,
without notice to Mortgagor, obtain an environmental site assessment for the
Mortgaged Property prepared by an environmental consulting firm selected by
Mortgagee and an appraisal of the Mortgaged Property prepared by an appraiser
selected by Mortgagee. Mortgagor shall promptly on demand reimburse Mortgagee
for the cost of the assessment and appraisal and the cost thereof shall be
secured by this Mortgage. Mortgagor shall grant and hereby irrevocably grants
to Mortgagee, and any consulting firms and appraisers hired by Mortgagee,
access to the Mortgaged Property for purposes of preparing and obtaining all
assessments and appraisals.
2.5. Pursuant to Louisiana Revised Statutes 9:5136, et seq., Mortgagor
hereby designates Mortgagee, or any employee, agent, or other person named by
Mortgagee at the time any seizure of the Mortgaged Property is effected by
Mortgagee to serve as a keeper of the Mortgaged Property pending the judicial
sale thereof. The keeper's fees shall be determined by the Court before which
the proceedings are pending, and the payment of such fees shall be secured by
this mortgage.
2.6. If any proceedings are instituted to enforce this mortgage by
executory process or otherwise, all declarations of fact made by authentic act
before a notary public in the presence of two witnesses by a person declaring
that such facts lie within that person's knowledge shall constitute authentic
evidence of such facts for the purpose of executory process.
3. Other Provisions. 3.1. The parties to this mortgage waive the
production of mortgage, tax and assessment certificates and all other
certificates or researches, and release the undersigned Notary Public and the
surety on the undersigned Notary Public's bond from all resulting
responsibility and liability.
3.2. It is expressly agreed that any and all stipulations, agreements,
warranties, and covenants by Mortgagor in favor of Mortgagee contained in this
mortgage, and all rights, powers, and privileges conferred in this mortgage on
Mortgagee by any of the provisions of this mortgage shall inure to and be for
the benefit of and may be exercised by Mortgagee, its successors, and assigns.
All covenants and agreements contained in this mortgage to be observed or
performed by Mortgagor shall be binding upon Mortgagor and upon Mortgagor's
heirs, administrators, executors, successors, and assigns, as well as upon any
person, firm, or corporation hereafter acquiring title to the Mortgaged
Property, or any part thereof, by, through, or under Mortgagor, and the word
"Mortgagor," unless the context otherwise requires, shall also mean and include
the heirs, administrators, executors, successors, and assigns of Mortgagor, and
any other person, firm, or corporation acquiring title to any of the Mortgaged
Property by, through, or under Mortgagor.
3.3. If any provision of this mortgage is invalid or unenforceable, such
invalidity or unenforceability shall not affect the other provisions of this
mortgage.
THUS DONE AND PASSED, in multiple originals at Houston, Texas, on the
day, month, and year first above written, in the presence of the undersigned
competent witnesses, who sign their names with the appearer and the undersigned
Notary Public.
WITNESSES: MORTGAGOR:
FISHING TOOLS, INC.
BY:
- --------------------------------- ----------------------------------
NAME: EUGENE L. BUTLER
TITLE: PRESIDENT
- ---------------------------------
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NOTARY PUBLLC
MY COMMISSION EXPIRES __________________ [SEAL]
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