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EXHIBIT 10.59
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT (this "Amendment") is made
as of May 1, 1998 by each of the undersigned (each individually a "Debtor" and
collectively, "Debtors"), in favor of Energy Capital Investment Company PLC, an
English investment company, EnCap Equity 1994 Limited Partnership, a Texas
limited partnership, and Gecko Booty 1994 I Limited Partnership, a Texas
limited partnership (collectively, "Secured Party").
RECITALS:
1. Future Petroleum Corporation, a Utah corporation ("Buyer") executed
those certain Promissory Notes dated November 25, 1997, payable to the
order of Secured Party in the aggregate principal amount of
$6,600,000, which were renewed, extended and increased, but not
novated or extinguished, by those certain Renewal Promissory Notes of
even date herewith, payable to the order of Secured Party in the
aggregate principal amount of $7,260,000 (such promissory notes, as
from time to time amended, and all promissory notes given in
substitution, renewal or extension therefor or thereof, in whole or in
part, collectively, the "Notes")
2. The Notes were executed pursuant to (i) a Purchase and Sale Agreement
dated November 25, 1997, (as amended, supplemented or restated, the
"November 1997 Purchase Agreement"), by and between Buyer and Secured
Party and (ii) a Purchase and Sale Agreement dated April 30, 1998 (as
amended, supplemented or restated, the "May 1998 Purchase Agreement"),
by and between Buyer, Energy Capital Investment Company PLC, EnCap
Equity 1994 Limited Partnership and NCI Enterprises, Inc.
3. Pursuant to the November 1997 Purchase Agreement, Debtors gave to
Secured Party a Security Agreement dated November 25, 1997 (the
"Original Agreement"), pursuant to which Debtors granted to Secured
Party a security interest in the Collateral as defined therein.
4. Debtors and Secured Party desire to amend the Original Agreement as
expressly set forth herein.
NOW, THEREFORE, in consideration of the premises, of the benefits
which will inure to Debtors from Secured Party' extension of credit to Buyer
under the Notes, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, and in
order to induce Secured Party to extend credit under the Notes, Debtors hereby
agrees with Secured Party, as follows:
ARTICLE I - Definitions and References
Section 1.1 Terms Defined in the Original Agreement. Unless the
context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment.
Section 1.2 Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.
"Amendment" means this First Amendment to Security Agreement.
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"Security Agreement" means the Original Agreement, as amended
by this First Amendment to Security Agreement.
ARTICLE II - Amendments
Section 2.1 Notes. The definition of "Notes" in the Original
Agreement is hereby amended to include those certain Renewal Promissory Notes
of even date herewith by Buyer, payable to the order of Secured Party in the
aggregate principal amount of $7,260,000, given in renewal, extension and
increase, but not novation or extinguishment, of the Notes as defined in the
Original Agreement, as from time to time amended, and all promissory notes
given in substitution, renewal or extension therefor or thereof, in whole or in
part.
Section 2.2 Purchase Agreement. The definition of "Purchase
Agreement" in the Original Agreement is hereby amended to include the November
1997 Purchase Agreement and the May 1998 Purchase Agreement.
Section 2.3 Grant and Re-Grant of Security Interest. As collateral
security for all of the Secured Obligations, each Debtor hereby pledges and
assigns, and re-pledges and re-assigns, to Secured Party and grants and
re-grants to Secured Party a continuing security interest, for the benefit of
Lenders, in and to all right, title and interest of each Debtor in and to any
and all of the Collateral, whether now owned or existing or hereafter acquired
or arising and regardless of where located.
ARTICLE III -- Miscellaneous
Section 3.1. Ratification of Security Agreement. The Original
Agreement as hereby amended is hereby ratified and confirmed in all respects.
Any reference to the Security Agreement in any Note Document shall be deemed to
refer to this Amendment also, and any reference in any Note Document to any
other document or instrument amended, renewed, extended or otherwise affected
by this Amendment shall also refer to this Amendment. The execution, delivery
and effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Secured Party under the Security Agreement or any other Note
Document nor constitute a waiver of any provision of the Security Agreement or
any other Note Document.
Section 3.2. Survival of Agreements. Debtors hereby represent and
warrant that all representations and warranties contained in the Original
Agreement are true and correct as of the date hereof. All representations,
warranties, covenants and agreements of Debtors herein shall survive the
execution and delivery of this Amendment and the performance hereof, including
without limitation the extension of credit pursuant to the Purchase Agreement,
and shall further survive until all of the Obligations are paid in full. All
statements and agreements contained in any certificate or instrument delivered
by Debtors hereunder or under the Security Agreement to Secured Party shall be
deemed to constitute representations and warranties by, or agreements and
covenants of, Debtors under this Amendment and under the Security Agreement.
Section 3.3. Documents. This Amendment is a Note Document, and all
provisions in the Security Agreement pertaining to Note Documents apply hereto.
Section 3.4. Counterparts. This Amendment may be separately executed
in counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Amendment.
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IN WITNESS WHEREOF, each Debtor has caused this Amendment to be
executed and delivered this Amendment by its officer thereunto duly authorized,
as of the date first above written.
FUTURE PETROLEUM CORPORATION,
a Utah corporation
By: /s/ B. XXXX XXXXX
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B. Xxxx Xxxxx, President
FUTURE ENERGY CORPORATION,
a Nevada corporation
By: /s/ B. XXXX XXXXX
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B. Xxxx Xxxxx, President
FUTURE PETROLEUM CORPORATION,
a Texas corporation
By: /s/ B. XXXX XXXXX
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B. Xxxx Xxxxx, President
BMC DEVELOPMENT NO. 1 LIMITED PARTNERSHIP,
a Texas limited partnership
FUTURE ACQUISITION 1995, LTD.,
a Texas limited partnership
By: Future Petroleum Corporation,
a Texas corporation, General Partner
By: /s/ B. XXXX XXXXX
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B. Xxxx Xxxxx, President
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