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EXHIBIT 4.11
PLEDGE AGREEMENT
(STOCK)
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of August
14, 1998, made by ENCAP EQUITY 1994 LIMITED PARTNERSHIP, 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:
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ARTICLE I
DEFINITIONS
SECTION 1.1 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.
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"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 1.2 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 1.3 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 2.1 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"):
2.1.1 All issued and outstanding shares of capital stock of
each Pledged Share Issuer identified in Attachment 1 hereto.
2.1.2 All other Pledged Shares issued from time to time.
2.1.3 All other Pledged Property, whether now or hereafter
delivered to the Lender in connection with this Pledge Agreement.
2.1.4 All Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Property.
2.1.5 All proceeds of any of the foregoing.
SECTION 2.2 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
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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 2.3 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 2.4 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 2.5 Continuing Security Interest. This Pledge Agreement
shall create a continuing security interest in the Collateral and shall
2.5.1 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,
2.5.2 Be binding upon the Pledgor and its successors,
transferees and assigns, and
2.5.3 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.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 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.
3.1.1 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.
3.1.2 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.
3.1.3 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 19.01% of the issued and outstanding shares of capital
stock of each Pledged Share Issuer.
3.1.4 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.
3.1.5 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,
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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 4.1 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 4.2 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 4.3 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 4.4 Voting Rights; Dividends, etc. The Pledgor agrees:
4.4.1 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
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4.4.2 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 4.5 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 5.1 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:
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5.1.1 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.
5.1.2 To receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with Section
5.1.1 above.
5.1.3 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 5.2 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 5.3 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 5.4 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.
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ARTICLE VI
REMEDIES
SECTION 6.1 Certain Remedies. If any Event of Default shall have
occurred and be continuing:
6.1.1 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.
6.1.2 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
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(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 6.2 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:
6.2.1 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.
6.2.2 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.
6.2.3 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.
6.2.4 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 6.3 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
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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 6.4 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 6.5 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 7.1 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 7.2 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
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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 7.3 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 7.4 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 7.5 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 7.6 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 7.7 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 7.8 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
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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.
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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.
ENCAP EQUITY 1994 LIMITED
PARTNERSHIP, a Texas limited partnership
By: EnCap Investments L.C., General Partner
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Address: 0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
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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
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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 2,424,973 19.01%
a Utah corporation
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