Document:

Exhibit 10.59

 

SECURITY AGREEMENT

 

THIS
SECURITY AGREEMENT (this “Security Agreement”),
dated as of September 7, 2010, is made between Clean Energy Compression
Corp., a British Columbia corporation (“Canadian OpCo”)
as debtor and I.M.W. Industries Ltd., a British Columbia corporation (“Company”) as secured party.

 

FOR VALUE RECEIVED, Canadian OpCo hereby
covenants, agrees, warrants, represents, acknowledges and confirms to and with
Company and creates and grants the mortgages, charges and security interests
hereinafter set forth, as follows::

 

Section 1.               Definitions; Interpretation.

 

(a)           All capitalized terms used in this Security Agreement and
not otherwise defined herein shall have the meanings assigned to them in the
Notes and the Asset Purchase Agreement. 
Words and expressions used herein that have been defined in the Act
shall be interpreted in accordance with their respective meanings given in the
Act whether expressed herein with or without initial capital letters and
whether in the singular or the plural unless otherwise defined herein or unless
the context otherwise requires, and wherever the context so requires in this
Security Agreement the singular shall be read as if the plural were expressed,
and vice-versa, and the provisions hereof shall be read with all grammatical
changes necessary dependent upon the person referred to being a male, female,
firm or corporation.

 

(b)           As used in this Security Agreement, the following terms
shall have the following meanings:

 

“Act” means the Personal Property Security
Act of British Columbia and all regulations thereunder as the same may be
amended from time to time.

 

“Asset Purchase Agreement” means the
Asset Purchase Agreement dated July 1, 2010 by and among Clean Energy, a
California corporation, 0884808 B.C. Ltd., a British Columbia corporation and a
wholly-owned subsidiary of Clean Energy, and Canadian OpCo, on the one hand,
and Company, 652322 B.C. Ltd., a British Columbia corporation, Miller Family
Trust and Bradley N. Miller, on the other hand.

 

“Collateral” has the meaning set
forth in Section 2.

 

“Event of Default” has the meaning
set forth in Section 6.

 

“Lien” means any mortgage, deed of
trust, pledge, security interest, assignment, deposit arrangement, charge or
encumbrance, lien, or other type of preferential arrangement.

 

“Notes” means, collectively, the Year
1 Promissory Note, Future Payment Note #1, Future Payment Note #2 and Future
Payment Note #3.

 

“Obligations” means the indebtedness,
liabilities and other obligations of Canadian OpCo to Company from time to time
(i) under or in connection with the Notes and (ii) 

 

1

 

with
respect to any liability of Canadian OpCo transferred by Company to Canadian
OpCo pursuant to the Agreement in respect of which Company has continued to
provide a guarantee, indemnity or other obligation to a third party on behalf
of Canadian OpCo.

 

“Senior Event of Default” means any
default in the performance of any term, covenant or condition contained in the
agreement or instrument under which any Senior Indebtedness is issued, or any other default thereunder, in each case
permitting the Senior Lender to accelerate or demand repayment of, or to put or
cause the redemption or prepayment of, such Senior Indebtedness.

 

“Senior Indebtedness” means any
indebtedness, liabilities and other obligations of Canadian OpCo to any Senior
Lender with respect to any working capital, revolving credit or other line of
credit facility, any term loan facility, or any other extension of credit to Canadian
OpCo by a Senior Lender, including reimbursement obligations under letters of
credit (or guaranties, as applicable) and obligations in respect of bankers’
acceptances, obligations in respect of interest rate protection agreements and
other derivative products and in respect of currency exchange and purchase
agreements, and renewals, extensions, refinancings, deferrals, amendments and
modifications of the items described above.

 

“Senior Lender” means a bank,
insurance company or financial institution engaged in the business of lending
money or other institutional lender.

 

(c)           Where applicable and except as otherwise defined herein,
terms used in this Security Agreement shall have the meanings assigned to them
in the Act.

 

(d)           In this Security Agreement, (i) the meaning of
defined terms shall be equally applicable to both the singular and plural forms
of the terms defined; and (ii) the captions and headings are for
convenience of reference only and shall not affect the construction of this Security
Agreement.

 

Section 2.               Security Interest.

 

(a)           For the consideration aforesaid and as security for the
payment and performance of the Obligations (as hereinafter defined), Canadian
OpCo, subject to the exceptions set out in subsection (b) hereof, does
hereby:

 

(i)                                     mortgage and
charge as and by way of a fixed and specific charge to and in favour of Company
and assign and transfer to Company and grant to Company, by way of mortgage,
charge, assignment and transfer, a security interest in all Company’s right,
title and interest, both present and future, in and to all of its presently
owned or held and after acquired or held personal property, of whatever nature
or kind and wheresoever situate and all proceeds and renewals thereof and
therefrom, accretions thereto and substitutions therefor, including, without
limitation, all of the following now owned or hereafter owned or acquired by or
on behalf of Canadian OpCo:

 

a.                                       all inventory
of whatever kind and wherever situate, including, without limitation, goods
acquired or held for sale or lease or furnished or to be 

 

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furnished
under contracts of rental or service, all raw materials, work in process,
finished goods, returned goods, repossessed goods, and all packaging materials,
supplies and containers relating to or used or consumed in connection with any
of the foregoing (all of which is hereinafter collectively called the “Inventory”);

 

b.                                      all equipment
(other than Inventory) of whatever kind and wherever situate, including,
without limitation, all machinery, tools, apparatus, plant, fixtures,
furniture, furnishings, chattels, motor vehicles, vessels and other tangible
personal property of whatsoever nature or kind that is not Inventory, and all
parts, components, attachments, accessories, accessions, replacements,
substitutions, additions and improvements to any of the foregoing (all of which
is hereinafter collectively called the “Equipment”);

 

c.                                       all book
accounts and book debts and generally all accounts, debts, dues, claims, choses
in action and demands of every nature and kind howsoever arising or secured
including letters of credit and advices of credit, which are now due, owing or
accruing or growing due to or owned by or which may hereafter become due, owing
or accruing or growing due to or owned by Company (all of which is hereinafter
collectively called the “Accounts”);

 

d.                                      All deeds,
documents, writings, papers, books of account and other books and
electronically recorded data relating to or being records of Accounts, Chattel
Paper or Documents of Title or by which such are or may hereafter be secured,
evidenced, acknowledged or made payable;

 

e.                                       all contractual
rights, insurance claims, licences, goodwill, patents, trademarks, trade names,
copyrights and other industrial or intellectual property of Canadian OpCo, all other choses in action
of Canadian OpCo of every kind
which now are, or which may at any time hereafter be, due or owing to or owned
by Canadian OpCo, and all other
intangible property of Canadian
OpCo which is not Accounts, Chattel Paper, Instruments, Documents of
Title, Securities or Money;

 

f.                                         all Money;

 

g.                                      the undertaking
of Canadian OpCo; and

 

h.                                      all Chattel
Paper, Documents of Title (whether negotiable or not), Instruments, Intangibles
and Securities now owned or hereafter owned or acquired by or on behalf of Canadian OpCo (including such as may be
returned to or repossessed by Canadian
OpCo), and all other goods of Canadian
OpCo which are not Equipment, Inventory or Accounts; and

 

(ii)                                  charge as and
by way of a floating charge to and in favour of Company, and grant to Company a security interest in and
to:

 

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a.                                       all Canadian OpCo’s right, title and interest
in and to all its presently owned or held and after acquired or held real,
immovable and leasehold property and all interests therein, and all easements,
rights-of-way, privileges, benefits, licences, improvements and rights whether
connected therewith or appurtenant thereto or separately owned or held,
including all structures, plant and other fixtures (all of which is hereinafter
collectively called “Real Property”); and

 

b.                                      all property,
assets and undertakings of Canadian
OpCo, both present and future, of whatsoever nature or kind and wheresoever
situate, and all Proceeds thereof and therefrom, other than such of its
property, assets and undertakings as are otherwise validly and effectively
subject to the charges and security interests in favour of Company created
pursuant to section 1.1(a) hereof; and

 

(iii)                               mortgage and
charge as and by way of a fixed and specific charge to and in favour of
Company, and assign and transfer to Company and grant to Company, by way of
mortgage, charge, assignment and transfer, a security interest in all of Canadian OpCo’s right, title and
interest, both present and future, in and to all of its presently owned or held
and after acquired or held property which:

 

a.                                       is or hereafter
becomes a fixture, or

 

b.                                      constitutes a
licence, quota, permit or other similar right or benefit or crops.

 

The
mortgages, charges, assignments and transfers and security interests created or
granted pursuant to Sections 1.1 (a), (b) and (c) hereof are
hereinafter collectively called the “Security Interest”, and all property,
assets, interests and undertakings (including Proceeds) subject to the Security
Interest or otherwise charged or secured hereby or expressed to be charged,
assigned or transferred or secured by any instruments supplemental hereto or in
implementation hereof are hereinafter collectively called the “Collateral”.

 

(b)           The Security Interest granted hereby
shall not extend or apply to and the Collateral shall not extend to or include:

 

(i)                                     Consumer Goods,
or

 

(ii)                                  any intangibles
of Canadian OpCo to the extent that (A) such general intangibles are not
assignable or capable of being encumbered as a matter of law or under the terms
of the license, lease or other agreement applicable thereto, without the
consent of the licensor or lessor thereof or other applicable party thereto and
(B) such consent has not been obtained.

 

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(iii)                               the last day of
the term of any lease or agreement therefor but upon the enforcement of the
Security Interest Company shall stand possessed of such last day in trust to
assign and dispose thereof as Company shall direct.

 

(c)           This Security Agreement shall create a continuing security
interest in the Collateral which shall remain in effect until terminated in
accordance with Section 18 hereof.

 

(d)           Company agrees that while no Event of Default exists (i) nothing
in this Security Agreement shall impair Canadian OpCo’s control, use and
disposition of its assets, including the Collateral, and (ii) Canadian
OpCo may possess, operate, collect, lease, sell, license, consign, use and
enjoy and deal with the Collateral in the course of its business.

 

(e)           Canadian OpCo
acknowledges that the Security Interest attaches upon the execution of this
Security Agreement (or in the case of any after acquired property, at the time
of acquisition thereof), that value has been given, and that Canadian OpCo has,
or in the case of after acquired property will have at the time of acquisition,
rights in the Collateral.

 

Section 3.               Subordination.  All Liens and security interests now or
hereafter existing of Company in any property or assets of Canadian OpCo
(including any Liens and security interests under this Security Agreement)
shall be subject, subordinate and junior in all respects and at all times to
the Liens and security interests now or hereafter existing of the Senior
Lenders therein, regardless of the time or order of attachment or perfection of
such Liens and security interests, the time or order of filing of financing
statements, the acquisition of purchase money or other Liens and security
interests, the time of giving or failure to give notice of the acquisition or
expected acquisition of any purchase money or other Liens and security
interests, or any other circumstances whatsoever.  Company will execute and deliver to any
Senior Lender such subordination agreement as may be reasonably requested by
such Senior Lender, and execute, acknowledge, deliver, file, notarize and
register all such further agreements, instruments, certificates, documents and
assurances, and perform such acts as such Senior Lender shall, acting
reasonably, deem necessary or appropriate in connection with any Senior
Indebtedness.  Company waives any and all
notice of the incurrence of the Senior Indebtedness or any part thereof and any
amendment to or extension of any Senior Indebtedness.  Company will
not (i) at any time contest the validity, perfection, priority or
enforceability of any Liens and security interests of any Senior Lender in any
collateral, or (ii) interfere with or in any manner oppose a
disposition of any collateral by any Senior Lender in accordance with
applicable law.

 

Section 4.               Financing Statements, Etc.  Canadian OpCo hereby authorizes
Company to file at any time and from time to time any financing statements
describing the Collateral, and Canadian OpCo shall execute and deliver to
Company, and Canadian OpCo hereby authorizes Company to file, at any time and
from time to time, all amendments to financing statements, assignments,
continuation financing statements and termination statements, in form
reasonably satisfactory to Company, as Company may reasonably request, to
perfect and continue perfected or provide notice of the security interest of
Company in the Collateral and to accomplish the purposes of this Agreement.  Company hereby:

 

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(i)                                     acknowledges
receiving a copy of this Security Agreement, and

 

(ii)                                  waives all
rights to receive from Canadian OpCo a copy of any financing statement,
financing change statement or verification statement filed, issued or obtained
at any time in respect of this Security Agreement.

 

Section 5.               Representations and Warranties.  Canadian OpCo represents and warrants to
Company that the execution, delivery and performance by Canadian OpCo of this
Security Agreement have been duly authorized by all necessary action of
Canadian OpCo, and this Security Agreement constitutes the legal, valid and
binding obligation of Canadian OpCo, enforceable against Canadian OpCo in
accordance with its terms.

 

Section 6.               Events of Default.  For purposes of this Security Agreement, any
of the following events which shall occur and be continuing shall constitute an
“Event of Default”:

 

(a)           Any indebtedness under the Notes is not paid when and as
the same shall become due and payable, whether at maturity, by acceleration or
otherwise, (regardless of whether any such failure to pay any indebtedness
under the Notes is due to the existence of a Senior Event of Default or as a
result of the restricting of payments under the Notes by any Senior Lender),
and any such amount shall remain unpaid for a period of thirty (30) days
following delivery of notice thereof by Company;

 

(b)           Canadian OpCo shall (A) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of itself or any
part of its property, (B) become subject to the appointment of a receiver,
trustee, custodian or liquidator for itself or any part of its property if such
appointment is not terminated or dismissed within thirty (30) days, (C) make
an assignment for the benefit of creditors, (D) fail generally or admit in
writing to its inability to pay its debts as they become due,
(E) institute any proceedings under any bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the rights of creditors
generally, or file a petition or answer seeking reorganization or an
arrangement with creditors to take advantage of any insolvency law, or file an
answer admitting the material allegations of a bankruptcy, reorganization or insolvency
petition filed against it, or (F) become subject to any involuntary
proceedings under any bankruptcy, reorganization, receivership, insolvency or
other similar law affecting the rights of creditors generally, which proceeding
is not dismissed within thirty (30) days of filing; or

 

(c)           Canadian OpCo shall liquidate, wind-up or dissolve (or
suffer any liquidation, wind-up or dissolution), except that an amalgamation or
other combination with an Affiliate of Canadian OpCo, where the surviving or
continuing Entity remains obligated to perform the Obligations, shall not
constitute an Event of Default hereunder.

 

6

 

For all purposes, including
without limitation any application to register a crystallized floating charge
under the Land Title Act (British Columbia) against any Real Property, the
floating charge created by this Security Agreement shall be crystallized and
become a fixed charge upon the earliest of:

 

(i)                                     the occurrence
of an Event of Default; or

 

(ii)                                  Canadian OpCo
taking any action pursuant to Section 7 hereof to enforce and realize upon
any or all of the Security Interest created by this Security Agreement,

 

and in any event upon the appointment by
Canadian OpCo of a Receiver pursuant to Section 8 hereof

 

Section 7.               Remedies.

 

(a)           Upon the occurrence and
continuance of any Event of Default, Company may declare any of the Obligations
to be immediately due and payable and shall have, in addition to all other
rights and remedies granted to it in this Agreement, all rights and remedies of
a secured party under applicable laws. 
Without limiting the generality of the foregoing, to enforce and realize on the security constituted by
this Security Agreement Company may take any action permitted by law or in
equity, as it may deem expedient, and in particular, but without limiting the
generality of the foregoing, Company may do any of the following upon the
occurrence and continuance of any Event of Default:

 

(i)                                     appoint by
instrument a receiver, receiver and manager or receiver-manager (the person so
appointed is hereinafter called the “Receiver”) of the Collateral, with or
without bond as Company may determine, and from time to time in its absolute
discretion remove such Receiver and appoint another in its stead;

 

(ii)                                  enter upon any
premises of Canadian OpCo and take
possession of the Collateral with power to exclude Canadian OpCo, its agents and its servants therefrom, without
becoming liable as a mortgagee in possession;

 

(iii)                               preserve,
protect and maintain the Collateral and make such replacements thereof and
repairs and additions thereto as Company may deem advisable;

 

(iv)                              sell, lease or
otherwise dispose of all or any part of the Collateral, whether by public or
private sale or lease or otherwise, in such manner, at such price as can be
reasonably obtained therefor and on such terms as to credit and with such
conditions of sale and stipulations as to title or conveyance or evidence of
title or otherwise as Companyh may seem reasonable, provided that if any sale,
lease or other disposition is on credit Canadian OpCo will not be entitled to
be credited with the proceeds of any such sale, lease or other disposition
until the monies therefor are actually received; and

 

(v)                                 exercise all of
the rights and remedies of a secured party under the Act.

 

7

 

Canadian OpCo agrees that Company may exercise
its rights and remedies hereunder immediately upon default, except as may be
otherwise provided in the Act, and Canadian OpCo hereby expressly confirms that
except as may be otherwise provided herein or in the Act, Company has not given
any covenant, express or implied, and is under no obligation to allow Company
any period of time to remedy any default prior to Company exercising its rights
and remedies hereunder.  All monies or
other forms of payment received by Canadian OpCo in payment of any Account,
after default under this Security Agreement has occurred, will be received and held
by Canadian OpCo in trust for Company. 
In accordance with the Property Law Act (British Columbia), the doctrine
of consolidation applies to this Security Agreement.

 

(b)           The cash proceeds actually received from the sale or other
disposition or collection of Collateral, and any other amounts received in
respect of the Collateral the application of which is not otherwise provided
for herein, shall be applied to the payment of the Obligations.  Any surplus thereof which exists after
payment and performance in full of the Obligations shall be promptly paid over
to Canadian OpCo or otherwise disposed of in accordance with applicable
law.  Canadian OpCo shall remain liable
to Company for any deficiency which exists after any sale or other disposition
or collection of Collateral.

 

Section 8.               Receiver.  A
Receiver appointed pursuant to this Security Agreement shall be the agent of
Canadian OpCo and not of Company and Company shall not be in any way
responsible for any misconduct, negligence or non-feasance on the part of any
Receiver, its servants, agents or employees. 
A Receiver shall, to the extent permitted by law or to such lesser
extent permitted by its appointment, have all the powers of Company hereunder,
and in addition shall have power to carry on the business of Canadian OpCo and
for such purpose to enter upon, use and occupy all premises owned or occupied
by Canadian OpCo wherein Collateral may be situate, maintain Collateral upon
such premises, use Collateral directly or indirectly in carrying on Canadian
OpCo’s business and from time to time to borrow money either unsecured or
secured by a security interest in any of the Collateral.  Company shall not be responsible or liable
for any debts contracted by it, for damages to persons or property or for salaries
or non-fulfilment of contracts during any period when Company shall manage the
Collateral upon entry, as herein provided, nor shall Company be liable to
account as mortgagee in possession or for anything except actual receipts or be
liable for any loss on realization or for any default or omission for which a
mortgagee in possession may be liable. 
Company shall not be bound to do, observe or perform or to see to the
observance or performance by Canadian OpCo of any obligations or covenants
imposed upon Canadian OpCo nor shall Company, in the case of Securities, Instruments
or Chattel Paper, be obliged to preserve rights against other persons, nor
shall Company be obliged to keep any of the Collateral identifiable.  Canadian OpCo hereby waives any applicable
provision of law permitted to be waived by it which imposes higher or greater
obligations upon Company than aforesaid.

 

Section 9.               Notices.  Except as may be otherwise provided herein,
all notices, requests, waivers and other communications made pursuant to this
Security Agreement shall be made in accordance with the Asset Purchase
Agreement.

 

Section 10.             No Waiver; Cumulative Remedies.  No failure on the part of Company to
exercise, and no delay in exercising, any right, remedy, 

 

8

 

power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  Company
may grant extensions of time and other indulgences, take and give up security,
accept compositions, compound, compromise, settle, grant releases and
discharges, refrain from perfecting or maintaining perfection of the Security
Interest, and otherwise deal with Canadian OpCo, account debtors of Canadian
OpCo, sureties and others and with the Collateral, the Security Interest  and other security interests as Company may
see fit without prejudice to the liability of Canadian OpCo or Company’s right
to hold and realize on the security constituted by this Security Agreement. The rights and
remedies under this Security Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges that may otherwise be available to
Company.

 

Section 11.             Binding Effect.  This Security Agreement shall be binding
upon, inure to the benefit of and be enforceable by Canadian OpCo, Company and
their respective successors and assigns.

 

Section 12.             Governing Law.  This Security Agreement shall be governed by,
and construed in accordance with, the law of British Columbia, except as
required by mandatory provisions of law and to the extent the validity or
perfection of the security interests hereunder, or the remedies hereunder, in
respect of any Collateral are governed by the law of a jurisdiction other than
British Columbia.

 

Section 13.             Entire Agreement; Amendment
..  This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and shall
not be amended except by the written agreement of the parties.

 

Section 14.             Assignment.  Company may,
with notice to Canadian OpCo, at any time assign, transfer or grant a security
interest in this Security Agreement and the Security Interest.  Canadian OpCo expressly agrees that the
assignee, transferee or secured party, as the case may be, shall have all of
Company’s rights and remedies under this Security Agreement and Canadian OpCo
will pay the Obligations to the assignee, transferee or secured party, as the
case may be, as the Obligations become due.

 

Section 15.             Severability.  Whenever possible, each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations.  If, however, any provision of this Security
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only
to the extent of such prohibition or invalidity without affecting the remaining
provisions of this Security Agreement, or the validity or effectiveness of such
provision in any other jurisdiction.

 

Section 16.             Amalgamation.  Canadian
OpCo acknowledges and agrees that in the event it amalgamates with any
other company or companies it is the intention of the parties hereto that the
term “Debtor” when used herein shall apply to each of the amalgamating
companies and to the amalgamated company, such that the Security Interest
granted hereby:

 

9

 

(i)                                     shall extend to
“Collateral” (as that term is herein defined) owned by each of the amalgamating
companies and the amalgamated company at the time of amalgamation and to any “Collateral”
thereafter owned or acquired by the amalgamated company, and

 

(ii)                                  shall secure
the “Obligations” (as that term is herein defined) of each of the amalgamating
companies and the amalgamated company to Company at the time of amalgamation
and any “Obligations” of the amalgamated company to Company thereafter
arising.  The Security Interest shall
attach to “Collateral” owned by each company amalgamating with Canadian OpCo, and by the amalgamated
company, at the time of amalgamation, and shall attach to any “Collateral”
thereafter owned or acquired by the amalgamated company when such becomes owned
or is acquired.

 

Section 17.             Counterparts.  This Security Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement.

 

Section 18.             Termination.  Upon payment and performance in full of all
Obligations, the security interest created under this Security Agreement shall
terminate and Company shall promptly execute and deliver to Canadian OpCo such
documents and instruments reasonably requested by Canadian OpCo as shall be
necessary to evidence termination of all security interests given by Canadian
OpCo to Company hereunder.  Any partial payment or satisfaction of the Obligations
shall be deemed not to be a redemption or discharge of this Security Agreement.  Canadian OpCo shall be entitled to a release
and discharge of this Security Agreement upon full payment and satisfaction of
all Obligations

 

[remainder of page intentionally left blank]

 

10

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Security Agreement,
as of the date first above written.

 

	
   

  	
  Clean
  Energy Compression Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  I.M.W.
  Industries Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

 

11Exhibit 10.60

 

COMMITMENT TO PROVIDE FUNDS

 

This
Commitment to Provide Funds is made as of September 7, 2010 between Clean
Energy, a California corporation (“Clean Energy”),
Clean Energy Compression Corp., a British Columbia corporation (“CECC”), 0884808 B.C. Ltd., a British
Columbia corporation (“0884808”),
and HSBC Bank Canada (“HSBC”), a
Canadian chartered bank.

 

RECITALS

 

WHEREAS, Clean Energy, 0884808 and CECC are parties to an
Asset Purchase Agreement dated July 1, 2010 (the “Asset
Purchase Agreement”), pursuant to which CECC will acquire
substantially all of the assets and business of I.M.W. Industries Ltd. (“IMW”), a British Columbia
corporation;

 

WHEREAS, at the closing of the transactions contemplated by
the Asset Purchase Agreement, CECC will deliver to IMW certain preferred shares
of CECC (the “Earnout Shares”);

 

WHEREAS, following the delivery by CECC to IMW of the
Earnout Shares, 0884808 has agreed, pursuant to the Asset Purchase Agreement
and in exchange for the Earnout Shares, to pay to B&M Miller Equity
Holdings Inc. (the “Holdco”) one or more earn-out payments (each an “Earn-Out Payment”
and collectively, the “Earn-Out Payments”), based upon the Adjusted Gross Profit (as such term is
defined in the Asset Purchase Agreement) of the Business (as such term is
defined in the Asset Purchase Agreement), provided that the aggregate Earn-Out
Payments paid to Holdco pursuant to the Asset Purchase Agreement will not
exceed Forty Million Dollars ($40,000,000);

 

WHEREAS, HSBC and IMW are parties to an amended and
restated facilities letter dated December 19, 2007, as amended by letters
dated December 15, 2008, March 23, 2009, December 1, 2009, December 22,
2009, March 26, 2010 and June 14, 2010 (collectively, the “Commitment Letter”) pursuant to
which HSBC has provided to IMW certain credit facilities (the “Credit Facilities”) and pursuant to
which IMW and other parties thereto have granted certain security documents
(the “Security”) as security in
favour of HSBC;

 

WHEREAS, in connection with the closing of the transactions
contemplated by the Asset Purchase Agreement, HSBC, CECC, 0884808, Clean Energy
and certain other parties have entered or will enter into an Assumption
Agreement (the “Assumption Agreement”),
pursuant to which, inter alia, the
Credit Facilities and the obligations of IMW under the Commitment Letter will
be assumed by CECC; and

 

WHEREAS, in order to induce HSBC to enter into the
Assumption Agreement, Clean Energy, 0884808 and CECC have agreed to enter into
this Commitment to Provide Funds.

 

NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual representations, warranties, covenants and promises contained
herein, the adequacy and

 

 

sufficiency
of which are hereby acknowledged by each of the parties, the parties hereto agree
as follows:

 

AGREEMENT

 

1.             Commitment
to Provide Funds.  Clean
Energy and 0884808 hereby agree that should CECC pay any of the Earn-Out
Payments on behalf of 0884808, and should the making of such Earn-Out Payment
result in CECC being in breach of any of the terms, conditions or provisos of
the Assumption Agreement, the Commitment Letter or the Security, then Clean
Energy and 0884808 shall, either directly or indirectly, furnish CECC with the
necessary funds (the “Funds”) to
enable CECC to make such Earn-Out Payment to the Holdco and to remain in
compliance with the terms, conditions and provisos of the Assumption Agreement,
the Commitment Letter and the Security.

 

2.             Assignment
and Postponement of Claims.  
0884808 agrees to grant to HSBC an assignment and postponement of claims
with respect to all amounts owing from time to time by CECC to 0884808
(including the repayment by CECC to 0884808 of the Funds in the aggregate),
which assignment and postponement of claims shall permit payments to be made by
CECC to 0884808 as agreed to between CECC and 0884808, provided that CECC is
not in breach of any of the terms, conditions or provisos under the Assumption
Agreement, the Commitment Letter or the Security at the time that such payments
are made by CECC, and provided that any such payment by CECC shall not result
in CECC being in breach of any of the terms, conditions or provisos of the
Assumption Agreement, the Commitment Letter or the Security.  Clean Energy agrees that in the event that
any Funds are furnished directly by Clean Energy (or any of its affiliates or
subsidiaries) to CECC, then Clean Energy shall enter, or cause such paying
affiliate or subsidiary company to enter, into an assignment and postponement
of claims in favour of HSBC with respect to any amounts owing by CECC to such
party.

 

3.             Entire
Agreement.  This
Commitment to Provide Funds constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes all prior oral and
written understandings, all contemporaneous oral negotiations and discussions,
and all other writings and agreements relating to the subject matter hereof.

 

4.             Notices.

 

(a)           All notices, requests, demands and other communications
hereunder shall be either (i) delivered in person, (ii) sent by
overnight courier service or other express commercial delivery service, or
(iii) sent by facsimile with confirmation of receipt and, in each case,
addressed as follows:

 

	
  If
  to CECC:

  	
   

  	
  Clean
  Energy Compression Corp.

  
	
   

  	
   

  	
  43676
  Progress Way

  
	
   

  	
   

  	
  Chilliwack,
  B.C. VR2 0C3

  
	
   

  	
   

  	
  Facsimile:
  (604) 792-3806

  
	
   

  	
   

  	
  Attention:
  Rick Wheeler

  

 

 

	
  If
  to 0884808:

  	
   

  	
  0884808
  B.C. Ltd.

  
	
   

  	
   

  	
  43676
  Progress Way

  
	
   

  	
   

  	
  Chilliwack,
  B.C. VR2 0C3

  
	
   

  	
   

  	
  Facsimile:
  (604) 792-3806

  
	
   

  	
   

  	
  Attention:
  Rick Wheeler

  
	
   

  	
   

  	
   

  
	
  If
  to Clean Energy:

  	
   

  	
  Clean
  Energy

  
	
   

  	
   

  	
  3020
  Old Ranch Parkway, Suite 400

  
	
   

  	
   

  	
  Seal
  Beach, CA 90740

  
	
   

  	
   

  	
  Facsimile:
  (562) 493-4532

  
	
   

  	
   

  	
  Attention:
  Rick Wheeler

  
	
   

  	
   

  	
   

  
	
  If
  to HSBC:

  	
   

  	
  HSBC
  Bank Canada

  
	
   

  	
   

  	
  Vancouver
  Main Branch

  
	
   

  	
   

  	
  Suite 200
  – 885 West Georgia Street

  
	
   

  	
   

  	
  Vancouver,
  B.C. V6C 3G1

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:
  (604) 641-1808

  
	
   

  	
   

  	
  Attention:
  Cam Rathwell, Senior Account

  
	
   

  	
   

  	
                   Manager,
  Commercial Banking

  

 

(b)           All notices, requests, instructions or documents given to
any party in accordance with this Section 4 shall be deemed to have
been given on the date of mailing or transmission, whether delivered by hand,
by overnight courier service, or by facsimile, with confirmation of receipt on
such date.  Any party hereto may change
its address specified for notices herein by designating a new address by notice
given in accordance with this Section 4.

 

5.             Modifications,
Amendments and Waivers. 
This Commitment to Provide Funds cannot be amended or changed nor any
performance, term, or condition waived in whole or in part, except by a writing
signed by the party against whom enforcement of the amendment, change or waiver
is sought.  No delay or failure on the
part of any party in exercising any rights hereunder, and no partial or single
exercise thereof, will constitute a waiver of such rights or of any other rights
hereunder.

 

6.             Governing
Law.  This
Commitment to Provide Funds is to be construed in accordance with and governed
by the internal laws of the State of Delaware or any similar successor
provision, without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other than the internal
laws of the State of Delaware to the rights and duties of the parties.

 

7.             Counterparts.  This Commitment to Provide Funds may be
executed in any number of counterparts which may be delivered by facsimile,
each of which shall be deemed to be an original, but all of which counterparts
shall together constitute one and the same instrument.

 

 

8.             No
Third-Party Beneficiaries. 
The terms and provisions of this Commitment to Provide Funds are
intended solely for the benefit of each party hereto and their respective
successors and permitted assigns, and the parties do not intend to confer
third-party beneficiary rights upon any other individual or entity.

 

[Signatures Follow On a Separate Page]

 

 

IN
WITNESS WHEREOF, each of the parties has caused this Commitment to Provide
Funds to be executed on its behalf by their respective officers thereunto duly
authorized all as of the date first written above.

 

	
   

  	
  Clean Energy

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  0884808 B.C. Ltd.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Clean Energy Compression Corp.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]