EXHIBIT 10.12
PLEDGE AGREEMENT
(Stock)
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of August 14,
1998, made by XXXXX ENERGY RESOURCES, LTD., a Texas limited partnership, (the
"Pledgor"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
a national banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of August 14, 1998
(together with all amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement"), between FUTURE PETROLEUM
CORPORATION, a Utah corporation (the "Borrower") and the Lender, the Lender has
extended Commitments to make Loans to, and issue Letters of Credit at the
request of, the Borrower; and
WHEREAS, the Borrower or an Affiliate (as defined in the Credit Agreement)
of the Borrower has entered into or may enter into certain Hedging Agreements
(as defined in the Credit Agreement) with the Lender or an Affiliate of the
Lender, pursuant to the terms of the Credit Agreement;
WHEREAS, as a condition precedent to the making of the initial Loan and
the issuance of Letters of Credit under the Credit Agreement, and the Lender's
or such Affiliate of the Lender's obligations under the Hedging Agreements
referred to above, the Pledgor is required to execute and deliver this Pledge
Agreement; and
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lender to make Loans (including
the initial Loan) to, and to issue Letters of Credit at the request of, the
Borrower pursuant to the Credit Agreement, and to induce the Lender or such
Affiliate of the Lender to enter into Hedging Agreements with the Borrower or
an affiliate of the Borrower, the Pledgor agrees, for the benefit of the
Lender, as follows:
ARTICLE I
DEFINITIONS
SECTION I.1 Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in the first recital.
"Distributions" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"Lender" is defined in the preamble.
"Pledge Agreement" is defined in the preamble.
"Pledged Property" means all Pledged Shares, and all other pledged shares
of capital stock, all other securities, all assignments of any amounts due
or to become due with respect to the Pledged Shares, all other instruments
which are now being delivered by the Pledgor to the Lender or may from time
to time hereafter be delivered by the Pledgor to the Lender for the purpose
of pledge under this Pledge Agreement or any other Loan Document, and all
proceeds of any of the foregoing.
"Pledged Share Issuer" means each Person identified in Attachment 1 hereto
as the issuer of the Pledged Shares identified opposite the name of such Person.
"Pledged Shares" means all shares of capital stock of any Pledged Share
Issuer which are delivered by the Pledgor to the Lender as Pledged Property
hereunder.
"Pledgor" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
Illinois.
SECTION I.2 Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION I.3 U.C.C. Definitions. Unless otherwise defined herein or
the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION II.1 Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Lender, and hereby grants to the Lender a continuing security interest in, all
of the following property (the "Collateral"):
II.1.1 All issued and outstanding shares of capital stock of
each Pledged Share Issuer identified in Attachment 1 hereto.
II.1.2 All other Pledged Shares issued from time to time.
II.1.3 All other Pledged Property, whether now or hereafter
delivered to the Lender in connection with this Pledge Agreement.
II.1.4 All Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Property.
II.1.5 All proceeds of any of the foregoing.
SECTION II.2 Security for Obligations. This Pledge
Agreement secures the prompt payment and performance in full of (a) all
Obligations now or hereafter existing under the Credit Agreement, the Notes and
each other Loan Document, whether for principal, interest, costs, fees,
expenses, or otherwise, including without limitation, Reimbursement
Obligations, and (b) all other obligations of the Borrower or the Pledgor to
the Lender or any Affiliate of the Lender, now or hereafter owing, howsoever
created, arising or evidenced, whether direct or indirect, primary or
secondary, fixed or absolute or contingent, joint or several, regardless of
how evidenced or arising, including without limitation all Hedging
Obligations (as defined in the Credit Agreement) arising under the Hedging
Agreements, between the Borrower or any other Affiliate or now or hereafter
existing or due or to become due and (c) all other obligations of the
Borrower or any Affiliate of the Borrower and the
Lender or any Affiliate of the Lender, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent or now or hereafter existing
or due or to become due (all such Obligations and other obligations being the
"Secured Obligations").
SECTION II.3 Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares, shall be delivered to and held by or on behalf of the Lender pursuant
hereto, shall be in suitable form for transfer by delivery, and shall be
accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION II.4 Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share at a time when no Default has
occurred and is continuing, such Dividend may be paid directly to the Pledgor.
If any such Default has occurred and is continuing then any such Dividend shall
be paid directly to the Lender.
SECTION II.5 Continuing Security Interest. This Pledge Agreement
shall create a continuing security interest in the Collateral and shall
II.5.1 Remain in full force and effect until payment in full of
all Secured Obligations and the termination of the Commitments and any
other commitments of the Lender to the Pledgor,
II.5.2 Be binding upon the Pledgor and its successors,
transferees and assigns, and
II.5.3 Inure to the benefit of the Lender and its successors,
transferees, and assigns.
Without limiting the foregoing clause (c), the Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan to any other Person or
entity, and such other Person or entity shall thereupon become vested with all
the rights and benefits in respect thereof granted to the Lender under any Loan
Document (including this Pledge Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions
of Section 10.11 of the Credit Agreement. Upon the indefeasible payment in
full of all principal and interest comprising the Secured Obligations and the
termination of the Commitments and any other commitments of the Lender to the
Pledgor, the security interest granted herein shall terminate and all rights to
the Collateral shall revert to the Pledgor. Upon any such termination, the
Lender will, at the Pledgor's sole expense, deliver to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all
certificates and instruments representing or evidencing all Pledged Shares,
together with all other Collateral held by the Lender hereunder, and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 Warranties, etc. The Pledgor represents and warrants
unto the Lender, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by the Pledgor to the
Lender of any Collateral, as set forth in this Article.
III.1.1 Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full
right and authority to pledge and assign) such Collateral, free and clear
of all liens, security interests, options, or other charges or
encumbrances, except any lien or security interest granted pursuant hereto
in favor of the Lender.
III.1.2 Valid Security Interest. The delivery of such
Collateral to the Lender together with stock powers endorsed in blank is
effective to create a valid, perfected, first priority security interest
in such Collateral and all proceeds thereof, securing the Secured
Obligations. No filing or other action will be necessary to perfect or
protect such security interest.
III.1.3 As to Pledged Shares. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and
constitute 36.80% of the issued and outstanding shares of capital stock of
each Pledged Share Issuer.
III.1.4 Authorization, Approval, etc. No authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority, regulatory body or any other Person is required
either
(a) for the pledge by the Pledgor of any Collateral
pursuant to this Pledge Agreement or for the execution, delivery,
and performance of this Pledge Agreement by the Pledgor, or
(b) for the exercise by the Lender of the voting or
other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares, as may be required in connection with
a disposition of such Pledged Shares by laws affecting the offering
and sale of securities generally, the remedies in respect of the
Collateral pursuant to this Pledge Agreement.
III.1.5 Compliance with Laws. The Pledgor is in compliance with
the requirements of all applicable laws (including, without limitation,
the provisions of the Fair Labor Standards Act), rules, regulations and
orders of every governmental authority, the non-compliance with which
could materially adversely affect the business, properties, assets,
operations, condition (financial or otherwise) or prospects of the Pledgor
or the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION IV.1 Protect Collateral; Further Assurances, etc. The Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Lender hereunder). The Pledgor will warrant
and defend the right and title herein granted unto the Lender in and to the
Collateral (and all right, title, and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Lender may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Lender to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
SECTION IV.2 Stock Powers, etc. The Pledgor agrees that all Pledged
Shares (and all other shares of capital stock constituting Collateral)
delivered by the Pledgor pursuant to this Pledge Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Lender. The Pledgor will, from
time to time upon the request of the Lender, promptly deliver to the Lender
such stock powers, instruments, and similar documents, satisfactory in form
and substance to the Lender, with respect to the Collateral as the Lender may
reasonably request and will, from time to time upon the request of the Lender
after the occurrence of any Event of Default, promptly transfer any Pledged
Shares or other shares of common stock constituting Collateral into the name
of any nominee designated by the Lender.
SECTION IV.3 Continuous Pledge. Subject to Section 2.4, the
Pledgor will, at all times, keep pledged to the Lender pursuant hereto all
Pledged Shares and all other shares of capital stock constituting Collateral,
all Dividends and Distributions with respect thereto, and all other Collateral
and other securities, instruments, proceeds, and rights from time to time
received by or distributable to the Pledgor in respect of any Collateral.
SECTION IV.4 Voting Rights; Dividends, etc. The Pledgor agrees:
IV.4.1 After any Default shall have occurred and be continuing,
promptly upon receipt thereof by the Pledgor and without any request
therefor by the Lender, to deliver (properly endorsed where required
hereby or requested by the Lender) to the Lender all Dividends,
Distributions, all interest, all principal, all other cash payments, and
all proceeds of the Collateral, all of which shall be held by the Lender
as additional Collateral for use in accordance with Section 6.4; and
IV.4.2 After any Event of Default shall have occurred and be
continuing and the Lender has notified the Pledgor of the Lender's
intention to exercise its voting power under this Section 4.4.2
(a) the Lender may exercise (to the exclusion of the
Pledgor) the voting power and all other incidental rights of
ownership with respect to any Pledged Shares or other shares of
capital stock constituting Collateral and the Pledgor hereby grants
the Lender an irrevocable proxy, exercisable under such
circumstances, to vote the Pledged Shares and such other Collateral,
and
(b) promptly to deliver to the Lender such additional
proxies and other documents as may be necessary to allow the Lender
to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and
proceeds which may at any time and from time to time be held by the Pledgor but
which the Pledgor is then obligated to deliver to the Lender, shall, until
delivery to the Lender, be held by the Pledgor separate and apart from its
other property in trust for the Lender. The Lender agrees that unless an
Event of Default shall have occurred and be continuing and the Lender shall
have given the notice referred to in Section 4.4.2, the Pledgor shall have
the exclusive voting power with respect to any shares of capital stock
(including any of the Pledged Shares) constituting Collateral and the Lender
shall, upon the written request of the Pledgor, promptly deliver such
proxies and other documents, if any, as shall be reasonably requested by the
Pledgor which are necessary to allow the Pledgor to exercise voting power
with respect to any such share of capital stock (including any of the Pledged
Shares) constituting Collateral; provided, however, that no vote shall be
cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would cause an Event of Default, impair any Collateral or be
inconsistent with or violate any provision of the Credit Agreement or any
other Loan Document (including this Pledge Agreement).
SECTION IV.5 Additional Undertakings. The Pledgor will not, without
the prior written consent of the Lender, (a) sell, assign, transfer, pledge, or
encumber in any other manner Pledgor's interest in the Pledged Share Issuer, or
(b) permit any of the assets of the Pledged Share Issuer to be sold, assigned,
transferred, pledged, or encumbered in any other manner.
ARTICLE V
THE LENDER
SECTION V.1 Lender Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Lender the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Lender's discretion, to take any action
and to execute any instrument which the Lender may deem necessary or advisable
to accomplish the purposes of this Pledge Agreement, including without
limitation:
V.1.1 After the occurrence and continuance of a Default, to ask,
demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral.
V.1.2 To receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with Section 5.1.1
above.
V.1.3 To file any claims or take any action or institute any
proceedings which the Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Lender with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default,
the Lender agrees that it shall first request that the Pledgor perform such
action and, if the Pledgor shall not have performed such action within five (5)
days following such request, the Lender shall be entitled to take such action
pursuant hereto.
SECTION V.2 Lender May Perform. If the Pledgor fails to perform
any agreement contained herein after being requested in writing to so perform,
the Lender may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Lender incurred in connection therewith shall be
payable by the Pledgor pursuant to Section 6.5.
SECTION V.3 Lender Has No Duty. The powers conferred on the Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for the reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Lender shall have no duty as to any Collateral or
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Property, whether or not the Lender has or is deemed to have knowledge
of such matters, or (b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION V.4 Reasonable Care. The Lender is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral, if it
takes such action for that purpose as the Pledgor reasonably requests in
writing at times other than upon the occurrence and during the continuance
of any Event of Default, but failure of the Lender to comply with any such
request at any time shall not in itself be deemed a failure to exercise
reasonable care.
ARTICLE VI
REMEDIES
SECTION VI.1 Certain Remedies. If any Event of Default shall have
occurred and be continuing:
VI.1.1 The Lender may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may, without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Lender's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Lender may deem commercially reasonable. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten days' prior
notice to the Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
VI.1.2 The Lender may
(a) transfer all or any part of the Collateral into the
name of the Lender or its nominee, with or without disclosing that
such Collateral is subject to the lien and security interest
hereunder;
(b) notify the parties obligated on any of the Collateral
to make payment to the Lender of any amount due or to become due
thereunder;
(c) enforce collection of any of the Collateral by suit
or otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature
of any party with respect thereto;
(d) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral;
(e) take control of any proceeds of the Collateral; and
(f) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION VI.2 Securities Laws. If the Lender shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section
6.1, the Pledgor agrees that, upon request of the Lender, the Pledgor will,
at its own expense:
VI.2.1 Execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers thereof
to execute and deliver (in each case to the extent required by law), all
such instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of the Lender,
advisable to register such Collateral under, or otherwise permit the
Collateral to be privately sold or transferred in compliance with, the
provisions of the Securities Act of 1933, as from time to time amended
(the "Securities Act"), and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which, in
the opinion of the Lender, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations
of the Securities and Exchange Commission applicable thereto.
VI.2.2 Use its best efforts to qualify the Collateral under, or
to permit the Collateral to be privately sold or transferred in compliance
with, the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by the
Lender.
VI.2.3 Cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act.
VI.2.4 Do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.
SECTION VI.3 Compliance with Restrictions. The Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Lender is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Lender be liable nor accountable to the
Pledgor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION VI.4 Application of Proceeds. All cash proceeds received
by the Lender in respect of any sale of, collection from, or other realization
upon, all or any part of the Collateral may, in the discretion of the Lender,
be held by the Lender as additional collateral security for, or then or at
any time thereafter be applied (after payment of any amounts payable to the
Lender pursuant to Sections 10.3 and 10.4 of the Credit Agreement and
Section 6.5 hereof) in whole or in part by the Lender against, all or any
part of the Secured Obligations in such order as the Lender shall elect.
Any surplus of such cash or cash proceeds held by the Lender and remaining
after payment in full of all the Secured Obligations, and the termination of
all Commitments and any other commitments by the Lender to the Pledgor, shall
be paid over to the Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
SECTION VI.5 Indemnity and Expenses. The Pledgor hereby indemnifies
and holds harmless the Lender from and against any and all claims, losses, and
liabilities arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement), except claims, losses, or liabilities
resulting from the Lender's gross negligence or wilful misconduct. Upon
demand, the Pledgor will pay to the Lender the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its counsel and of
any experts and agents, which the Lender may incur in connection with:
(a) the exercise or enforcement of any of the rights of
the Lender hereunder; or
(b) the failure by the Pledgor to perform or observe any
of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION VII.1 Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION VII.2 Amendments, etc. No amendment to or waiver of
any provision of this Pledge Agreement nor consent to any departure by the
Pledgor herefrom shall in any event be effective unless the same shall be in
writing and signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given.
SECTION VII.3 Protection of Collateral. The Lender may from time
to time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Lender may from time to time take any other action which the Lender reasonably
deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION VII.4 Addresses for Notices. All notices and other
communications provided to any party hereto under this Pledge Agreement
shall be in writing and shall be hand delivered or sent by a nationally
recognized overnight courier, certified mail (return receipt requested), or
telecopy to such party at its address or telecopy number set forth on the
signature pages hereof or at such other address or telecopy number as may be
designated by such party in a notice to the other party. Without limiting
any other means by which a party may be able to provide that a notice has
been received by the other party, a notice shall be deemed to be duly
received (a) if sent by hand, on the date when left with a responsible
person at the address of the recipient; (b) if sent by certified mail, on
the fifth business day after delivery to the U.S. Post Office; (c) if sent
by overnight courier, on the first business day after delivery to such
courier; or (d) if sent by telecopy, on the date of receipt by
the sender of an acknowledgment or transmission reports generated by the
machine from which the telecopy was sent indicating that the telecopy was
sent in its entirety to the recipient's telecopy number.
SECTION VII.5 Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION VII.6 Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION VII.7 The Lender as Agent for its Affiliates. As described
above, certain Affiliates of the Lender are or may become parties to certain
Hedging Agreements with the Pledgor and/or Affiliates of the Pledgor. This
Pledge Agreement secures the obligations of the Pledgor and such Affiliates, as
the case may be, under such Hedging Agreements, and the parties hereto
acknowledge for all purposes that the Lender acts as agent on behalf of such
Affiliates of the Lender which are so entitled to share in the rights and
benefits accruing to the Lender under this Pledge Agreement.
SECTION VII.8 Governing Law, Entire Agreement, etc. THIS
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF ILLINOIS. THIS PLEDGE AGREEMENT AND THE OTHER LOAN
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9 Non-Recourse Nature of Liability.
(a) Notwithstanding anything to the contrary contained or
implied in this Pledge Agreement, the Pledgor shall not be personally liable
under any theory for any amount due under the Credit Agreement, the Notes or
such other Loan Documents, and the Lender shall not seek a deficiency or
personal judgment against the Pledgor for payment of the Obligations evidenced
by the Credit Agreement, the Notes or such other Loan Documents. No property
or assets of the Pledgor, other than the Collateral pledged pursuant to this
Pledge Agreement, shall be sold, levied upon or otherwise used to satisfy any
judgment rendered in connection with any action brought against the Borrower
or its Subsidiaries with respect to this Pledge Agreement, the Credit
Agreement, the Notes or such other Loan Documents.
(b) Notwithstanding the provisions of Section 7.9(a) to the
contrary, nothing contained in this Pledge Agreement, the Credit Agreement or
any other Loan Document shall be construed to (i) impair or limit the rights of
the Lender arising under this Pledge Agreement, or any other Security Document
or other documents to which the Pledgor is a party thereto in its individual
capacity; (ii) impair or limit any of the Obligations of the Borrower or its
Subsidiaries under any Loan Document to which it is a party; (iii) impair or
limit the validity of the indebtedness evidenced by this Pledge Agreement, the
Credit Agreement, the Notes or the other Loan Documents or prevent the taking
of any action permitted by law against the Borrower or its Subsidiaries or the
assets of the Borrower or its Subsidiaries or the proceeds of such assets; or
(iv) prevent the commencement of any action, suit or proceeding against any
Person (or prevent the service of papers under any Person) for the purpose of
obtaining jurisdiction over the Borrower or its Subsidiaries.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
XXXXX ENERGY RESOURCES, LTD.,
a Texas limited partnership
By: Xxxxx Operating Company, Inc.,
a Texas corporation, General Partner
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:/s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Address: 000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
ATTACHMENT 1
to
Pledge Agreement
Pledged Shares
Pledged Share Issuer Common Stock
Authorized Outstanding Number of Shares %of Shares
Shares Shares Pledged Pledged
---------------------------------------------------------
Future Petroleum
Corporation, 30,000,000 12,757,015 4,694,859 36.80%
a Utah corporation
The Pledgor also pledges as Collateral its rights to purchase 250,000 fully
paid and nonassessable shares of the Future Petroleum Corporation's, a Utah
corporation ("Future Utah"), common stock, par value $0.01 per share at an
exercise price per share of $0.43, or as may be adjusted pursuant to
Paragraph 4 of the Stock Purchase Warrant No. 1007 issued by Future Utah in
favor of the Pledgor on August 14, 1998 (the "Stock Purchase Warrant"),
granted pursuant to the Stock Purchase Warrant and exerciable at any time
through August 14, 2003.
