TVC 8-K/A 08/17/05
As
filed with the Securities and Exchange Commission on August 17,
2005
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
AMENDMENT
NO. 1 TO
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported):
August
8,
2005
Tri-Valley
Corporation
(Exact
name of registrant as specified in its charter)
|
Delaware
|
|
001-31852
|
|
87-0505222
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(Commission
File Number)
|
|
(IRS
Employer
Identification
No.)
|
5555
Business Park South, Suite 200
Bakersfield,
California 93309
(Address
of principal executive office)
Issuer's
telephone number: 661-864-0500
Section
1 - Registrant’s Business and Operations
Item
1.01 Entry
into a Material Definitive Agreement
On
August
8, 2005, Tri-Western Resources, LLC, entered into a secured promissory note
in
the principal amount of $1,174,836 with Financial Federal Credit, Inc., as
the
holder to secure the purchase of goods and equipment, including trucking
equipment for use in Tri-Western’s calcium carbonate mining operations at the
Monarch Mine in California. The promissory note calls for installment payments
over 48 months and bears interest at 8.75 percent per annum.
Tri-Western
Resources is a joint venture between Tri-Valley Corporation and Trans Western
Materials, Inc. Tri-Valley is not a party to or guarantor of the loan, but
the
loan will be recorded on Tri-Valley’s consolidated financial statements because
Tri-Valley’s wholly owned subsidiary, Select Resources, Inc., has the right to
appoint a majority of the board of managers of Tri-Western
Resources.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits
(c) Exhibits
|
Exhibit
|
Description
|
|
10.1
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Promissory
Note between Tri-Western Resources, LLC, Maker,a nd Financial Federal
Credit, Inc., Holder
|
|
10.2
|
Security
Agreement
|
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Date:
August 11, 2005
|
TRI-VALLEY
CORPORATION
/s/
Thomas J. Cunningham
|
| |
Thomas
J. Cunningham Chief Financial
Officer
|
Exhibit
10.1
PROMISSORY
NOTE
|
$1,174,836.00
|
Bakersfield
|
CA
|
August
2, 2005
|
|
(Total
of Note)
|
(City)
|
(State)
|
(Date)
|
FOR
VALUE
RECEIVED, Tri-Western Resources, LLC ('Maker') promises to pay to the order
of
Financial Credit Inc. (“Holder'), at 7 Corporate Park, Suite 240, Irvine, CA
92606, or such other place as Holder may, from time to time, designate in
writing, the amount of One million one hundred seventy-four thousand eight
hundred thirty six and 00/100 Dollars ($1,174,836.00), payable in consecutive
Monthly installments, as follows:
|
12
|
installments,
each in the amount of
|
$40,000.00
|
;then
|
|
36
|
installments,
each in the amount of
|
$19,301.00
|
;then
|
Said
consecutive Monthly installments shall commence on the 2nd day of September.
2005, and continue on the same day of each month thereafter until the
indebtedness evidenced hereby is paid In full; with interest from the date
hereof being payable on the unpaid principal amount at the maturity of each
Installment at the rate of eight and three quarters percent (8.75%) per annum
(but in no event shall such rata exceed any maximum permitted by applicable
law). Maker shall also pay to Holder an demand, on each installment (of
principal and/or interest) not fully paid prior to the fifth day (or such longer
period as required by law) after its due date, a late charge equal to the
maximum percentage of such overdue installment legally permitted as a late
charge, not to exceed five percent (5%): and after maturity of the entire
indebtedness (whether by acceleration or otherwise), Maker shall pay, on demand,
interest on the unpaid indebtedness (excluding unpaid late charges) at the
maximum lawful daily rate, but not to exceed 0.0666% per day, until paid in
full. Interest shall be calculated on the basis of a 360 day year and for the
actual number of days elapsed, unless such calculation would cause the effective
interest rate under this Note to exceed the maximum rate allowed by applicable
law, in which case such calculation shall be on the basis of a 365 day
year.
Upon
nonpayment when due of any amount owing hereunder, or if default occurs under
any security agreement; pledge, assignment dead of trust or any instrument
or
document executed to evidence, secure, guarantee, govern or in any way pertain
to the loan evidenced by this Note, Holder may, at its option, without notice
or
demand, accelerate the maturity of the indebtedness then outstanding under
this
Note and declare same to be at once due and payable whereupon it shall be and
become immediately due and payable. Maker, all endorsers, guarantors and any
other party liable on this Note also promise and agree to pay Holder's costs,
expenses and reasonable attorneys’ fees incurred in enforcing and/or collecting
this Note. Maker. all endorsers, guarantors and any other party liable on this
Note waive presentment for payment; demand, protest, notice of protest and
notice of nonpayment, default and dishonor, notice of intent to accelerate,
notice of acceleration, and further, to the extent allowed by law, waive all
benefits of valuation, appraisement and exemption laws. Holder may, without
notice, extend the time of payment of this Note, postpone the enforcement
hereof, grant any other indulgence, add or release any party primarily or
secondarily liable hereon and/or release or change any collateral securing
this
Note without affecting or diminishing Holder's right of recourse against Maker,
all endorsers, guarantors and other parties liable an this Note, which right
is
hereby expressly reserved. As used in this Note the term “Holder includes any
future holder of this Note. If more than one person signs this Note, the
obligations of each of them shall be joint and several.
As
a
material inducement to Holder to advance funds or otherwise provide financial
accommodations to or for the benefit of Maker and/or in consideration of Holder
having previously done so, it is agreed that Maker shall not, unless otherwise
required by law, have any right to voluntarily prepay any Indebtedness for
borrowed money now or hereafter owing to Holder (whether evidenced hereby or
otherwise); provided, however, that Maker may (unless otherwise expressly agreed
in writing) have the privilege of voluntarily prepaying any such indebtedness
in
full or in part at any time or from time to time if Maker shall: (i) give seven
days' prior written notice to Holder specifying the principal amount and date
of
any proposed voluntary prepayment and the indebtedness being voluntarily
prepaid; (ii) pay the amount specified in such voluntary prepayment notice,
in
good funds, on the date specified in such notice; (iii) simultaneously pay,
in
good funds, all principal, interest and other charges accrued and/or due to
Holder through the date of any such voluntary prepayment and (iv) simultaneously
pay a prepayment premium equal to the sum of (a) fifteen hundredths percent
(0.15%) of the principal amount then being voluntarily prepaid multiplied by
the
number of whole or partial calendar months between the date of such voluntary
prepayment and the scheduled final maturity date of the indebtedness being
prepaid, plus (b) two percent (2%) of the principal amount of the indebtedness
then being voluntarily prepaid, but not more than tire maximum amount permitted
by law. The principal amount of any voluntary partial prepayment shall be
applied to the scheduled installments of the indebtedness then being prepaid
in
the reverse order of their respective maturities, so that the amount and due
date only the latest maturing installment(s) shall be affected
thereby.
Notwithstanding
anything to the contrary in this Note or any related writing, all agreements
between Maker and Holder, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by reason
of demand for payment or acceleration of the maturity hereof or otherwise,
shall
the interest contracted for, charged or received by Holder exceed the maximum
amount permissible under applicable law. The right to accelerate maturity of
sums due under this Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Holder
does not intend to charge or collect any unearned interest in the event of
acceleration. If, from any circumstance whatsoever, interest would otherwise
be
payable to Holder in excess of the maximum lawful amount the interest payable
to
Holder shall be reduced to the maximum amount permitted under applicable law,
and if from any circumstance Holder shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal hereof and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of the principal hereof, such excess shall
be refunded to Maker. All interest paid or agreed to be paid to Holder shall,
to
the extent permitted by applicable law, be amortized, prorated, allocated,
and
spread throughout the full period until payment in full of the principal
(including the period of any extension or renewal hereof) so that the interest
hereon for such full period shall not exceed the maximum amount permitted by
applicable law. This paragraph shall control all agreements between Maker and
Holder.
The
proceeds from the loan evidenced by this Note are to be used for business
purposes only, and no part thereof is to be used for primarily consumer,
personal, family or household purposes.
THIS
WRITTEN AGREEMENT AND ALL OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH
REPRESENT THE FINAL. AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN
THE
PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. THIS NOTE MAY
NOT BE CHANGED OR TERMINATED ORALLY.
CO-MAKER MAKER
Tri-Western
Resources, LLC
By:
/s/Henry
J. Sandri
Henry J. Sandri, Executive Director
BY:
/s/Marshall Pettit
Marshall
Pettit, Managing Director
(Witness
for Maker and Co-Maker)
ENDORSEMENT
The
undersigned do each (jointly and severally) unconditionally guarantee the prompt
payment of the within Note at maturity or anytime thereafter, or on default
prior thereto, hereby waiving presentment for payment, demand, protest, notice
of protest notice of dishonor and notice of every kind and nature, and accepting
all of its provisions and authorizing Holder, without notice to any one or
more
or all of us, to substitute debtors, and/or to grant one or more extensions
in
whole or in part, and/or to receive security or additional security for the
payment hereof and/or to surrender, release or substitute any such
security.
If
any
payment on this Note is not paid when due, then the remaining unpaid
indebtedness shall, without notice or demand, become immediately due and
payable, at the option of Holder, and may be recovered in any suit brought
by
the Holder of this Note against any one or more or all of us, at the option
of
Holder, whether such suit has been commenced against Maker or not, and in any
such suit Maker may be joined with one or more or all of us, at the option
of
Holder.
The
Holder of this Note shall not be required to look to any security given or
held
for the payment of this Note, but may proceed against any one or more or all
of
us immediately upon a default in payment or otherwise. Any execution may be
immediately levied upon any real or personal property of the undersigned, all
rights of the undersigned to have personal property last taken and sold under
such execution being hereby expressly waived.
(Endorser)
(Endorser)
(Endorser)
Exhibit
10.2
SECURITY
AGREEMENT
This
Security Agreement dated August
2, 2005,
is by
Tri-Western
Resources, LLC
("Debtor”)
whose principal office (or residence) address is 220
Industrial Street Bakersfield, CA, 933307
in favor
of Financial
Federal Credit Inc.
("Secured Party”) whose address is 7
Corporate Park, Suite 240, Irvine, CA 92608.
1. To
secure the payment and performance of all indebtedness, obligations and
liabilities of Debtor to Secured Party of whatever kind whether previously,
contemporaneously, or subsequently incurred or created, whether direct or
acquired from third parties, whether contingent or fixed, and whether of the
same or different classes (including, without limiting the generality of the
foregoing, all indebtedness, obligations and liabilities arising out of or
relating to (i) advances. payments, loans, endorsements, guaranties, extensions
of credit, financial accommodations and/or benefits granted or extended by
Secured Party to or for the account of Debtor, (ii) notes, security agreements,
lease agreements, rental agreements, installment sale contracts, bailment
agreements, guaranties, and/or any other present or future agreements between
Debtor and Secured Party, an for (iii) expenses, charges, commissions and/or
interest owing by Debtor to Secured Party or chargeable to Debtor by Secured
Party), and all extensions, renewals and/or modifications of the foregoing
(collectively, the Obligations"), Debtor does hereby assign, transfer, pledge
and grant to Secured Party a security interest/lien in/upon all property listed
on any Schedule to this Agreement (the "Property"), and in all goods, inventory,
equipment, accounts, accounts receivable, documents, instruments, chattel paper,
contract rights, general intangibles, investment property, securities
entitlements, deposit accounts, fixtures and other property, wherever located,
now or hereafter belonging to Debtor or in which Debtor has any interest, and
in
all proceeds, insurance proceeds, substitutions, replacement parts, additions
and accessions of and/or to all of the foregoing (collectively, including the
Property, the "Collateral"). Debtor and Secured Party acknowledge that Secured
Party may (but shall not be obligated to) make future loans or extensions of
credit to Debtor, refinance existing Obligations of Debtor, or purchase from
third parties loans or indebtedness of Debtor, and Secured Party and Debtor
agree that the Collateral shall be security for any and all such
indebtedness.
2. Debtor
hereby represents and warrants to Secured Party and covenants and agrees with
Secured Party as follows: (a) All information supplied and statements made
to
Secured Party by or on behalf of Debtor relating to the Obligations or the
Collateral are and shall be true, complete and accurate, whether supplied or
made prior to, contemporaneously with or subsequent to the execution of this
Agreement (b) Debtor has good and marketable title to the Collateral, free
and
clear of any liens, security interests or encumbrances of any kind or nature
whatsoever (except any claimed by Secured Party) and Debtor will warrant and
defend the Collateral against all claims; (c) all Collateral listed on any
Schedule to this Agreement is in Debtor's possession at the location shown
above, unless a different location is disclosed on such Schedule for any item,
and shall at all times remain in Debtors possession and control; (d) Debtor
shall not change (i) its name, (ii) the location of any Collateral, or (iii)
the
location of (as applicable) Debtor's residence, principal place of business,
executive office or the place where Debtor keeps its business records, without
thirty (30) days prior written notice to Secured Party; (e) Debtor has full,
unrestricted and lawful power and authority to sell and assign the Collateral,
to grant Secured Party a security interest/lien therein/thereon as herein
provided and to execute and perform this Agreement and all other instruments
and
agreements executed by Debtor in favor of Secured Party, (f) if a corporation,
a
partnership, or a limited liability company, Debtor is (as applicable): (i)
duly
formed, organized, validly existing and in good standing in the state of its
incorporation or organization, (ii) duty qualified and in good standing in
every
jurisdiction where the nature of its business requires it to be so qualified,
and (iii) authorized by all requisite action of its stockholders and directors,
general partners or managers to execute, deliver and perform this Agreement;
(g)
Debtor will cause Secured Party to have a security interest and lien in/upon
the
Collateral which at all times shall be duly perfected, enforceable and superior
to any liens, encumbrances and interests other than Secure Party's, and Debtor
shall not permit the Collateral or any portion thereof to be or become subject
to any lien or encumbrance of any kind or nature whatsoever (except any claimed
by Secured Party), nor shall Debtor sell, pledge, grant any security interest
in, encumber, assign, rant, lease, lend, destroy or otherwise transfer or
dispose of, or permit the filing of a financing statement with respect to (other
than in favor of Secured Party) any Collateral, nor shall Debtor guarantee
any
obligation of any other person or entity except in favor of Secured Party,
without the prior written consent of Secured Party in such instance; (h) Debtor
shall comply (to the extent necessary to protect the Collateral and Secured
Party's interest therein) with the provisions of all leases, mortgages, deeds
of
trust or other contracts affecting any premises where any Collateral is or
may
be located and with any rules, laws, orders, ordinances or statutes of any
state, county, municipality or other authority having jurisdiction relating
to
such promises and/or the conduct of business thereon and/or use thereof; (i)
Debtor shall, at Debtor's sole cost and expense, keep and maintain all
Collateral in good condition and repair, and shall use and maintain the
Collateral in accordance with all applicable manufacturer's specifications
and
warranties; (j) all Collateral shall at all times remain personalty and shall
not become part of any realty to which it may he attached so that Secured Party
shall have the unrestricted right (subject only to the terms of this Agreement)
to remove all or any portion thereof from any premises where it may be located,
and Debtor will obtain and deliver to Secured Party, (in a form acceptable
to
Secured Party) appropriate waivers from landlords, mortgages and owners of
such
premises; (k) Debtor shall (at Debtor's expense) upon request by Secured Party,
obtain, execute and deliver all assignments, certificates, financing statements
or other documents, give further assurances and do all other acts and things
as
may be necessary to fully perfect Secured Party's interest in the Collateral
and
to protect, enforce or otherwise effectuate the terms of this Agreement; and
(I)
Secured Party has no obligation to lend or advance funds unless and until all
representations, warranties, conditions and requirements contained herein have
been satisfied including without limitation receipt by Secured Part of proof
of
ownership of the Collateral satisfactory to Secured Party in its sole
discretion, and any applicable subordinations and/or lien releases as may be
required by, and in a form acceptable to, Secured Party in its sole discretion.
Debtor hereby irrevocably designates and appoints Secured Party as Debtor's
agent and attorney-in-fact to sign and deliver all such assignments,
certificates, financing statements and other documents necessary to perfect,
protect, continue and/or enforce Secured Patty's interest in the Collateral
and
to file same with the appropriate office(s). Debtor hereby authorizes Secured
Party to file a financing statement in all appropriate locations.
3. Debtor
hereby acknowledges the validity of and affirms all of the Obligations, agrees
that they are and shall be secured by this Agreement and absolutely and
unconditionally agrees to punctually and fully pay and perform all Obligations.
Debtor shall pay to Secured Party on demand, on any installment of the
Obligations not fully paid prior to the filth day (or such longer period as
required by law) after its due date, a late charge equal to the maximum
percentage of such overdue installment legally permitted as a late charge,
not
to exceed five percent (5%); and after maturity of the entire unpaid
indebtedness (whether by acceleration or otherwise) of any one or more of the
Obligations, Debtor shall pay, on demand, interest on such matured indebtedness
(excluding unpaid late charges) at the maximum lawful daily rate, but not to
exceed 0.0666% per day, until paid in full.
4. Debtor
shall insure the Collateral against all risks of loss or damage from every
cause
(including without limitation fire, theft, vandalism, accident, flood,
earthquake and extended coverage) for not less than the full replacement value
as determined by Secured Party in its sole discretion, and shall carry liability
and property damage insurance covering the Collateral. All insurance shall
be in
form and amount and with licensed, solvent companies approved by Secured Party,
and shall name Secured Party as sole loss payee. Debtor shall pay the premiums
therefore and deliver said policies or duplicates to Secured Party. Each insurer
shall agree by endorsement upon the policy or policies issued by it or by
dependent instrument furnished to Secured Party to give Secured Party 30 days
prior written notice before the policy shall be modified or canceled and that
Secured Party's coverage shall not be diminished or invalidated by any
negligence, act or emission of Debtor. The proceeds of such insurance, at the
option of Secured Patty, shall be applied toward the replacement or repair
of
the Collateral or toward payment of the Obligations. Debtor hereby irrevocably
appoints Secured Party as its attorney-in-fact and agent to make claim for,
adjust, compromise, settle, receive payment of, and to sign all documents,
checks and/or drafts in payment of or relating to any claim for loss of or
damage to the Collateral and for any returned premiums. If any required
insurance expires, is canceled or modified, or is otherwise not in full force
and effect, Secured Party may but need not obtain replacement insurance. Secured
Party may but need not pay the premiums for insurance and/or replacement
insurance and the amount of all premiums so paid by Secured Party shall be
added
to Debtor's obligations hereunder and shall be reimbursed to Secured Party
on
demand together with interest thereon at the maximum lawful daily rate, not
to
exceed 0.0666% per day (but only to the extent permitted by law) from the date
paid by Secured Party until fully reimbursed by Debtor.
5. Secured
Party shall have the right, at any reasonable time, to inspect all or any
portion of the Collateral and/or Debtor's books and records. Debtor shall assist
Secured Party in making any such inspection and Debtor shall reimburse Secured
Party for its costs and expenses of making up to four such inspections per
year.
Upon request Debtor shall, from time to time, furnish a current financial
statement to Secured Party in form and content satisfactory to Secured Party,
and shall provide annual certified financial statements within five (5) days
of
Secured Party's request therefor.
6. If
Debtor shall fail to fully and timely pay, perform and fulfill any of its
Obligations, covenants or agreements to or with Secured Party and/or if Debtor
shall breach any of its warranties to Secured Party under this Agreement or
otherwise, Secured Party shall have the option, in its sole discretion and
without any obligation, to pay, perform, fulfill or cause the payment,
performance or fulfillment of same on behalf of Debtor, and all costs and
expenses incurred by Secured Party in connection therewith (including but not
limited to attorneys' fees, bond premiums, court costs, costs of retaking,
storing, preserving, selling and/or realizing on any Collateral) shall be added
to the Obligations hereby secured and shall be payable by Debtor to Secured
Party upon demand together with interest thereon at the maximum lawful dally
rate, not to exceed 0.0666% per day (but only to the extent permitted by law),
from the date advanced by Secured Party until fully repaid. Secured Party shall
have no obligation to make any demand upon or give any notice to Debtor prior
to
the exercise of any of its rights under this paragraph; and neither the exercise
nor the failure to exercise any such rights by Secured Party shall relieve
Debtor of any default or constitute a waiver of Secured Party's right to enforce
strict compliance with the terms of the Agreement at any time.
7. Debtor
assumes all liability and risk of loss and agrees to defend, indemnify and
hold
Secured Party harmless from and against all claims, liabilities, causes of
action and damages of any kind, including but not limited to injury or to death
of any person(s) and for loss, damage or destruction of any property, and for
any fines, penalties, costs, expenses and charges in any way arising out of
or
related to the Obligations, this Agreement, the Collateral or its use,
possession, storage, maintenance, repair, transportation or operation (including
without limitation all costs and expenses of investigation, all attorneys'
fees,
court costs, arbitration expenses and costs, and all special, consequential,
compensatory and punitive damages). Debtor, at its own cost and expense, shall
use, operate, maintain, repair, transport and store the Collateral in a safe
and
careful manner in compliance with all applicable laws, rules and regulations
(including without limitation those regulating hazardous substances, the
environment and public health or safety), industry standards, insurance
requirements and manufacturer's specifications and service bulletins. Debtor
also assumes and agrees to indemnify, pay and hold harmless Secured Party and
its directors, officers, employees and agents from all expenses, losses, costs,
claims, actions, causes of action, damages of any kind, liabilities, expenses
and attorney fees that Secured Party may incur or sustain in obtaining or
enforcing payment or performance of any of the Obligations or exercising its
rights and remedies under this Agreement or in connection with any action,
proceeding at appeal arising out of or related to this Agreement, the
Obligations and/or the Collateral, whether brought by Debtor or any third party.
The obligations of Debtor under this paragraph shall survive termination of
this
Agreement.
8. If
any Event of Default exists, Secured Party without notice or demand may do
one
or more of the following in any order, and such remedies shall be cumulative
(none of which shall be exclusive but each is in addition to any other remedy
available to Secured Party): (a) Secured Party may accelerate the maturity
of
the Obligations and declare same to be at once due and payable whereupon they
shall be immediately due and payable; (b) Secured Party may require Debtor
to
pay all accrued interest, late charges, collection charges, reimbursement for
any and all expenses incurred by Secured Party in enforcing any of the
Obligations or this Agreement and reasonable attorneys' fees; (c) Secured Party
may require Debtor to deliver any or all of the Collateral at Debtor's expense
to such place or places as Secured Party may designate; (d) Secured Party may
repossess/take possession of any or all of the Collateral wherever found,
voluntarily or involuntarily, without notice, demand or legal process (Debtor,
if permitted by applicable law, hereby waiving any right to notice or a
hearing), and Secured Patty may enter the premises where any or all Collateral
are located and disconnect, render unusable, and remove any or all Collateral
without liability to Debtor arising out of such entry, taking of possession
or
removal, and may use such premises without charge to store or show the
Collateral for sale or other disposition; (e) Secured Party may sell the
Collateral by public or private sale, hold, retain the Collateral in full or
partial satisfaction of the indebtedness due to Secured Party, or otherwise
dispose of the Collateral in any manner it chooses, free and clear of any claims
or rights of Debtor; and/or (f) Secured Party may sue to enforce Debtor's
performance hereof, or may exercise any other right or remedy then available
to
Secured Party permitted at law or in equity whether or not stated herein.
Failure or delay on the part of Secured Party to exercise any right or remedy
hereunder shall not operate as a waiver thereof. Debtor agrees that any public
or private sale shall be deemed commercially reasonable (i) if notice of any
such sale is mailed to Debtor (at the address far Debtor specified herein)
at
least ten (10) days prior to the date of any public sale or after which any
private sale will occur, (ii) if notice of any public sale is published in
a
newspaper of general circulation in the county where the sale will occur at
least once within the ten (10) days prior to the sale; (iii) whether the items
are sold in bulk, singly, or in such lots as Secured Part may elect; (iv)
whether or not the items sold are in Secured Party's possession and present
at
the time and place of sale; and (v) whether or not Secured Party refurbishes,
repairs or prepares the items for sale. Secured Party may be the purchaser
at
any public sale. In all cases, Debtor shall be liable for any deficiency due
and
owing to Secured Party after any public or private sale, plus all costs,
expenses and damages incurred by Secured Petty including but not limited to
all
legal fees whether or not suit is filed, allocable costs of in-house counsel,
costs related to the repossession, reconditioning and disposition of the
Collateral, and all incidental and consequential damages. No action taken by
Secured Party shall release Debtor from any of its obligations to Secured Party.
Debtor acknowledges and agrees that in any action or proceeding brought by
Secured Party to obtain possession of any Collateral, Secured Party shall be
entitled to issuance of a writ or order of possession (or similar legal process)
without the necessity of posting a bond, security or other undertaking which
is
hereby waived by Debtor and if Debtor contests Secured Party's right to
possession of any Collateral in any action or proceeding Debtor shall post
a
bond (issued by a national insurer authorized to issue such bonds in the
jurisdiction of such action or proceeding) in an amount equal to twice the
amount in controversy in such action or proceeding or twice the amount of
Debtor's unpaid obligations to Secured Party, whichever is less. The proceeds
of
any sale shall first be applied to the costs and expenses of Secured Party
including but not limited to recovering, transporting, storing, refurbishing,
and/or selling the items sold, attorneys' fees, court costs, bond and insurance
premiums, advertising, postage and publishing costs, and sales commissions.
Secured Party may without prior notice to or demand upon Debtor and with or
without the exercise of any of Secured Party's other rights or remedies, apply
toward the payment at Debtor's obligations (at any time owing to Secured Party)
any checks, drafts, notes, balances, reserves, accounts and sums belonging
to or
owing to Debtor and coming into Secured Party's possession and for such purpose
may endorse Debtor's name on any instrument or document payable to Debtor
(whether for deposit, collection, discount or negotiation). Without notice
to
Debtor, Secured Party may make such applications or change applications of
sums
previously paid and/or to be paid to Secured Party, to such Obligations as
Secured Party in its sole discretion may choose. The exercise or partial
exercise of any remedy shall not be construed as a waiver of any other remedy
nor constitute an election of remedies.
9. Protest
and all demands and notices of any action taken by Secured Party under this
Agreement, or in connection with any Collateral, except as otherwise provided
in
this Agreement are hereby waived by Debtor, and any indulgence of Secured Party,
substitution for, exchange of or release of any person liable on the Obligations
is hereby consented to. Debtor waives notice of the creation, advance, increase,
existence, extension or renewal of, and of any indulgence with respect to the
Obligations; waives presentment, demand, notice of dishonor, and protest; waives
notice of the amount of the Obligations outstanding at any time, notice of
any
change in financial condition of any person liable for the Obligations or any
part thereof, notice of any Event of Default; and all other notices respecting
the Obligations; and agrees that maturity of the Obligations or any part thereof
may be accelerated, extended or renewed one or more times by Secured Party
at
its sole discretion, without notice to Debtor. In performing any act under
this
Agreement any of the Obligations, time shall be of the essence and Secured
Party's acceptance of partial or delinquent payments or performance, or failure
or delay to exercise any right or remedy, shall not be a waiver of any
obligation of Debtor or right of Secured Party nor constitute a waiver of any
subsequent default.
10. This
Agreement, Secured Party's rights hereunder and/or any of the Obligations may
be
assigned from time to time by Secured Party, and in any such case the assignee
shall be entitled to all of the rights, privileges and remedies herein granted
to Secured Party; and Debtor hereby waives and agrees not to assert against
any
defense, setoff, claim, recoupment or counterclaim Debtor may have against
Secured Party or any prior assignee. Debtor shall not assign this Agreement
nor
any of Debtor's rights or obligations hereunder.
11. Debtor
shall be in default hereunder upon the occurrence of any of the following (each
an "Event of Default"); (a) Debtor or any endorser, guarantor, surety,
accommodation party at other person liable for the payment or performance of
any
of the Obligations ("Other Liable Party") fails to pay when due any sum due
to
Secured Party (whether hereunder or under any other Obligation to Secured Party)
or to timely perform any obligation, covenant, term or provision of this
Agreement or any other instrument and/or agreement how or hereafter existing
between the parties, or there exists any Event of Default thereunder; (b) any
warranty, representation or statement made to Secured Party by or on behalf
of
Debtor or any Other Liable Party is false in any respect when made or thereafter
becomes false or is breached; (c) Debtor's or any Other Liable Party's death,
dissolution, termination of existence, insolvency, business failure, assignment
for the benefit of creditors, bulk transfer, proceeding under any bankruptcy
or
insolvency law, being declared judicially incompetent, voluntary or Involuntary
consent to the appointment of a receiver, trustee, conservator, liquidator
or
legal guardian for them or any or all of their property; (d) a default under
any
Indebtedness of Debtor or any Other Liable Patty or any event permitting the
holder of any such Indebtedness to accelerate the maturity thereof, whether
or
not such event is cured; (e) the Collateral becomes, in the sole judgment of
Secured Party, unsatisfactory or insufficient in character or value; (f) Secured
Party in good faith believes that the prospect of payment or performance of
any
of the Obligations or this Agreement is impaired; (g) any change in the
management operation, ownership or control of Debtor or any Other Liable Party:
(h) any attachment, levy or execution against Debtor and/or any Other Liable
Party that is not released within 48 hours; (i) Debtor's or any Other Liable
Party's affairs so change as to, in Secured Party's sole discretion, increase
the credit risk involved and Secured Party thereby becomes insecure as to the
performance of this Agreement or any other agreement with Debtor or such Other
Liable Party, (j) Debtor shall incur, create, assume, cause or suffer to exist
any mortgage, trust, lien, security interest, pledge, hypothecation or other
encumbrance (other than Secured Party's interest therein) or attachment or
execution of any kind whatsoever upon, effecting or with respect to the
Collateral, this Agreement, or any of Secured Party's Interests under this
Agreement or any of the Obligations; (k) Debtor shall sell, pledge assign,
rent,
lease, land, destroy at otherwise transfer or dispose of any Collateral; (l)
failure of Debtor to obtain or maintain insurance on the Collateral satisfactory
to Secured Party in its sole discretion; or (m) any of the Obligations, this
Agreement, the security interest or any provision hereof for any reason
attributable to Debtor ceases to be in full force and effect or shall be
declared to be null and void or the validity or enforceability thereof shall
be
contested by Debtor or Debtor shall deny that it has any further liability
or
obligation thereunder.
12. The
term "Debtor" as used in this Agreement shall he construed as the singular
or
plural to correspond with the number of persons executing this instrument as
Debtor. "Secured Party" and "Debtor" as used in this Agreement include the
heirs, executors or administrators, successors, legal representatives,
receivers, and assigns of those parties. If more than one person executes this
Agreement as Debtor, their obligations under this Agreement shall be joint
and
several. Unless the context otherwise requires, terms used in this Agreement
which are defined in the Uniform Commercial Code are used with the meaning
as
therein defined. THIS WRITTEN AGREEMENT AND ALL OTHER DOCUMENTS EXECUTED IN
CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. No termination, modification, waiver or amendment of or to this
Agreement shall be effective unless in writing signed by Debtor and an officer
(assistant vice president or higher) of Secured Party. If any provision of
this
Agreement is rendered or declared invalid, illegal, or ineffective by any
existing or subsequently enacted legislation or decision of a court of competent
jurisdiction, such legislation or decision shall only invalidate such provision
to the extent so rendered or declared invalid, illegal or ineffective and shall
not impair, invalidate or nullify the remainder of this Agreement which shall
remain in full force and effect. THE PARTIES INTEND THAT THIS AGREEMENT AND
EACH
OF ITS TERMS BE VALID AND ENFORCEABLE AS WRITTEN AND, ACCORDINGLY, AGREE THAT
THE VALIDITY AND ENFORCEABILITY OF THIS AGREEMENT AND EACH OF ITS TERMS SHALL
BE
GOVERNED BY THE LAWS OF THE STATE OF DEBTOR'S LOCATION AS SET FORTH IN THIS
AGREEMENT, OR, IF ONE OR MORE OF THE TERMS OF THIS AGREEMENT WOULD BE INVALID
OR
UNENFORCEABLE UNDER THE LAWS OF SUCH STATE, THE LAWS OF THE STATE OF SECURED
PARTY'S LOCATION AS SET FORTH IN THIS AGREEMENT.
13. Any
notice or demand to Debtor hereunder or in connection herewith may be given
and
shall conclusively be deemed and considered to have been given and received
upon
the deposit thereof in the U.S. Mail, in writing, duly stamped and addressed
to
Debtor at the address set forth in this Agreement or at such other address
of
Debtor as Debtor shall have designated by notice in writing delivered to Secured
Party. Actual notice to Debtor, however given or received, shall always be
effective. DEBTOR, AS A MATERIAL INDUCEMENT FOR SECURED PARTY TO MAKE LOANS
OR
OTHER FINANCIAL ACCOMMODATIONS AVAILABLE TO DEBTOR, HEREBY IRREVOCABLY
DESIGNATES AND APPOINTS FIRST FEDERAL COMMERCIAL INC. HOUSTON, TEXAS AS
ATTORNEY-IN-FACT AND AGENT FOR DEBTOR, AND IN DEBTOR'S NAME, PLACE AND STEAD
TO
ACCEPT OR WAIVE SERVICE OF ANY PROCESS (AND FOR NO OTHER PURPOSE) WITHIN THE
STATE OF TEXAS, SECURED PARTY AGREEING TO GIVE WRITTEN NOTICE OF SUCH SERVICE
OR
WAVIER TO DEBTOR WITHIN THREE (3) DAYS AFTER SUCH SERVICE WAS EFFECTED OR SUCH
WAIVER WAS EXECUTED, BY MAILING SUCH WRITTEN NOTICE TO DEBTOR'S ADDRESS AS
SET
FORTH ABOVE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED; AGREES TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED IN HARRIS COUNTY,
TEXAS FOR ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, AND/OR CROSS-CLAIMS
ARISING OUT OF AND/OR RELATED TO THIS AGREEMENT, THE COLLATERAL AND/OR ANY
OTHER
PRESENT OR FUTURE OBLIGATIONS OF DEBTOR TO SECURED PARTY; EXCEPT THAT ANY ACTION
OR PROCEEDING (HOWEVER STYLED) TO OBTAIN POSSESSION OF ANY COLLATERAL OR OTHER
SECURITY FOR DEBTOR'S OBLIGATIONS OR TO COLLECT ANY SUM DUE ON THE OBLIGATIONS
MAY, IN SECURED PARTY'S SOLE DISCRETION, BE BROUGHT IN ANY STATE OR FEDERAL
COURT LOCATED IN THE JURISDICTION WHERE THE SUBJECT OF SUCH ACTION OR PROCEEDING
MAY BE SITUATED; WAIVES THE RIGHT TO OBJECT TO OR TRANSFER THE VENUE OF ANY
SUCH
ACTION OR PROCEEDING; AND CONSENTS AND AGREES THAT SERVICE OF PROCESS IN ANY
ACTION OR PROCEEDING BROUGHT IN ACCORDANCE HEREWITH SHALL BE GOOD AND SUFFICIENT
IF SENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO DEBTOR AT
HIS,
HER OR ITS ADDRESS AS PROVIDED HEREIN. THE PARTIES HEREBY WAIVE ANY AND ALL
RIGHTS TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM, CROSS-CLAIM,
DEFENSE OR OFFSET INVOLVING DEBTOR, SECURED PARTY OR ANY PERSON CLAIMING ANY
RIGHT OR INTEREST ACCRUED FROM, THROUGH OR UNDER ANY OF THEM; AND DEBTOR FURTHER
HEREBY WAIVES ANY AND ALL SPECIAL, EXEMPLARY, PUNITIVE AND CONSEQUENTIAL DAMAGES
IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT AND/OR THE ACTS OR
OMISSIONS OF SECURED PARTY OR ANY ASSIGNEE.
14. If
after receipt of any payment pursuant to any of the Obligations, Secured Party
is for any reason compelled to surrender each payment to any person or entity
because such payment is determined to be void or voidable as a preference,
fraudulent transfer, impermissible set off or recoupment, a diversion of trust
funds, or for any other reason, then such Obligation(s) shall be reinstated,
if
necessary and shall continue in full force notwithstanding any contrary action
which Secured Party or Debtor may have taken in reliance upon such payment.
Any
such contrary action so taken shall be without prejudice to Secured Party's
rights under the Obligations and hereunder and shall be deemed to have been
conditioned upon such payment having become final and irrevocable. The terms
of
paragraphs 1, 7, 10, 12, 13, 14 and 15 shall survive termination of the
Agreement.
15. All
agreements between Debtor and Secured Parry, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand for payment or acceleration of maturity
or otherwise, shall any Interest contracted for, charged or received by Secured
Party exceed the maximum amount permissible under applicable law. If, from
any
circumstance whatsoever, interest would otherwise be payable to Secured Party
in
excess of the maximum lawful amount, the Interest payable to Secured Party
shall
be reduced to the maximum amount permitted under applicable law and if from
any
circumstance Secured Party shall ever receive anything of value deemed interest
by applicable law in excess of the maximum lawful amount, an amount equal to
any
excessive interest shall be applied to the reduction of any principal and not
to
the payment of interest, or if such excessive interest exceeds the unpaid
balance of any principal, such excess shall be refunded to Debtor. All interest
paid or agreed to be paid to Secured Party shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full period until payment in full of any principal (including the period of
any
renewal or extension) so that the interest for such full period shall not exceed
the maximum amount permitted by applicable law. This paragraph shall control
all
agreements between Debtor and Secured Party.
WITNESS
(Attest if a corporation): DEBTOR:
Tri-Western
Resources, LLC
BY:
/s/
Henry J. Sandri
Henry
J.
Sandri, Executive Director
BY:
/s/Marshall Pettit
Marshall
Pettit, Managing Director
Subscribed
and sworn to before me, the undersigned notary public, on the date above
written:
BY:
SCHEDULE
"A"
This
schedule is attached to and becomes part of the Security Agreement, Installment
Sale Contract, Lease Agreement, dated August 2, 2005, between the
undersigned.
|
QUANTITY
|
YEAR
& MODEL
|
DESCRIPTION
OF PROPERTY
|
SERIAL
NUMBER
|
|
One
(1)
|
1998 LT8501
|
Ford
Sterling Boom Truck mounted with National 600C 17 Ton, 3 Section
Crane
(SN:29761)
|
1FDZW86F8WVA19323
|
|
One
(1)
|
2005 C12
|
Extec
Track Jaw Crusher with Hydraulic Drive & Deutz BF6M 1015C Engine
|
9032
|
|
One
(1)
|
1998 9806
|
Caterpillar
Wheel Loader equipped with Jones Skeleton Rock Bucket (SN: 17897),1/2
Rolled Liner, EROPS/Air, 29.5x25 Tires, w/recond, bucket, EROPS,
U Dozer
w/tilt, SS Ripper, New Engine
|
2KR02170
|
|
One
(1)
|
1989 D9N
|
Caterpillar
Crawler Tractor
|
1JD01624
|
|
One
(1)
|
1998 962G
|
Caterpillar
Wheel Loader equipped with 200hp 3126 Dita Engine, EROPS/Air,
G.P.
Bucket
w/Bolt on Edge
|
4PW00210
|
|
One
(1)
|
1996 T800
|
Kenworth
Water Truck equipped with 4,500 Gallon Tank, 10 Speed Trans, 3 Axle,
435hp
Cat Engine New Tank
|
1XKDDB9X9TS725434
|
|
One
(1)
|
1990 T800
|
Kenworth
Conventional Haul Tractor with Engine NTC 400 Cummings, Wet Kit & Jake
Brake New PTO and Jake
|
1XKDD29XXLS543046
|
|
One
(1)
|
2005 46070-10LP-C
|
Unitec
Low Profile Above Ground Truck Scale
|
22505
|
|
One
(1)
|
2005 F250
|
Ford
Truck equipped with 6.0L V8 Diesel Engine, 5 Spd Auto Trans,
A/C
|
1FTSX21P46EA05628
|
|
One
(1)
|
44070-10PV-W
|
Unitec
Portable Vehicle Scale with Remote 4" Display, Printer & Load
Cell
|
3679
|
|
One
(1)
|
2006 F250
|
Ford
Truck equipped with 6.0L V8 Diesel Engine, 5 Spd Auto Trans,
A/C
|
1FTSX21P26EA22234
|
Including
all attachments and accessories and all proceeds, rental proceeds, accounts
and
chattel paper arising out of or related to the sale, rental or other disposition
thereof.
This
schedule is hereby verified correct and undersigned Buyer(s), Lessee(s), or
Debtor(s) acknowledges receipt of a copy.
Seller,
Lessor, Secured Party Buyer,
Lessee, Debtor
Financial
Federal Credit Inc. Tri-Western
Resources, LLC
BY:
/s/
Henry J. Sandri
Henry
J.
Sandri, Executive Director
By:
BY:
/s/Marshall Pettit
Marshall
Pettit, Managing Director