FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT ("First
Amendment") dated January 15, 1999, is made between The
Exploration Company of Louisiana, Inc. ("Grantor") and
_________________________ ("Lender"), who agree as follows:
Recitals
WHEREAS, the Grantor and the Lender entered into that
certain Security Agreement dated November 6, 1998 (the "Security
Agreement") in order to secure the full and punctual payment and
performance of the indebtedness described therein; and
WHEREAS, the parties hereto desire to correct the
description of the Collateral and to express the intention of the
parties with respect to future changes in the description of the
Collateral.
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
Section 1. Amendments to Security Agreement. The Security
Agreement is hereby amended as follows:
(a) The following new definition of "New Funds" is
added to the Security Agreement after the definition of "Lien":
"New Funds" means new funds advanced to XCL
Land on or after November 6, 1998 through the
purchase of Units or otherwise up to the
aggregate outstanding principal amount of
$6,200,000.
(b) The definition of "Permitted Liens" is hereby
deleted in its entirety and in its place the following is
substituted:
"Permitted Liens" means (i) the Security Interests
and any other Liens created, assumed or existing with
respect to the Collateral in favor of Lender or in
favor of any other purchaser of Units (as defined in
the Subscription Agreement) or other provider of New
Funds to XCL Land (provided that the liens in favor of
such other persons do not cause the percentage stated
in Sections 2(A)(1) and 2(A)(2) hereof to be less than
the percentage of total New Funds provided by Lender)
and (ii) any other Liens permitted by Lender in writing
to be created or assumed or to exist with respect to
the Collateral.
(c) The definition of "Subscription Agreement"
contained in the Security Agreement is hereby changed to read as
follows:
"Subscription Agreement" means that certain
Subscription Agreement dated November 6, 1998
by and between XCL Land, Lender and XCL Ltd.
(d) The phrase "(collectively the "Indebtedness")"
is hereby inserted immediately after the phrase "unliquidated,
now existing or hereafter arising" in Section 2A of the Security
Agreement.
(e) The reference to "________%" in Section 2(A)(1)
and 2(A)(2) is hereby deleted and the phrase "_____%" is
substituted in its place.
(f) The following language is hereby inserted at
the end of Section 3 of the Security Agreement:
"or to an agent that Lender and all other
holders of security interests in Grantor's
Partnership Interest have agreed shall hold
the certificate or document on their behalf."
(g) The last two sentences of Section 11 of the
Security Agreement are deleted and the following new sentences
are substituted in their place:
Furthermore, Grantor has not heretofore
conveyed or agreed to convey or encumber any
Collateral in any way, except in favor of
Lender or other holders of Permitted Liens.
Lender understands and agrees, however, that
Grantor has granted a security interest in
all of its Partnership Interest in the
Partnership (other than the percentage of its
Partnership Interest covered hereby) to those
persons or entities who have previously
purchased Units or provided other New Funds.
Lender further agrees and acknowledges that
in the event that additional Units are sold
or additional New Funds are provided to XCL
Land after the date hereof by persons other
than Lender and secured by partnership
interests in L.M. Holding, Lender will
immediately upon demand by XCL Land (one or
more times, as appropriate) execute further
amendments to this Agreement releasing a
percentage of the Grantor's Partnership
Interest sufficient to allocate the security
interests in the partnership interest of L.M.
Holding among the Unit holders or other
providers of New Funds on a proportionate
basis (provided that no reduction in such
security interest need be made with respect
to amounts of New Funds in excess of an
aggregate of $6,200,000 principal
outstanding).
Section 2. Effect of Amendment. Except as expressly
amended hereby, the Security Agreement shall remain in full force
and effect. Nothing in this First Amendment releases any right,
claim, lien, security interests or entitlement of Lender created
by or contained in the Security Agreement, nor releases Grantor
from any covenant, warranty or obligation created by or contained
in the Security Agreement.
Section 3. Ratification of Security Agreement. The
Security Agreement is hereby ratified, adopted, confirmed and
renewed. All representations, warranties and covenants of
Grantor in the Security Agreement are hereby repeated, remade and
incorporated herein by this reference for the benefit of the
Lender, on and as of the date hereof. In furtherance of the
foregoing, Grantor hereby regrants to Lender a continuing
security interest in and to all right, title and interest of
Grantor whether now owned or hereafter acquired, in and to the
Collateral in order to secure the prompt and complete payment and
performance of the Indebtedness (as defined in the Security
Agreement as amended by this First Amendment).
Section 4. No Novation. All of the liens, privileges
and priorities existing under the Security Agreement are renewed,
extended and carried forward, nothing contained herein shall (i)
be construed as a novation of the Security Agreement or (ii)
release, cancel, terminate or otherwise impair the status or
priority of the security interests created by the Security
Agreement.
Section 5. Titles of Sections. All titles or headings
to sections of this First Amendment are only for the convenience
of the parties and shall not be construed to have any effect or
meaning with respect to the other content of such sections, such
other content being controlling as to the agreement between the
parties hereto.
Section 6. Governing Law. This First Amendment is a
contract made under and shall be construed in accordance with and
governed by the laws of the United States of America and the
State of Louisiana.
Section 7. Successors and Assigns. All covenants and
agreements made by or on behalf of the Grantor in this First
Amendment shall bind Grantor's successors and assigns and shall
inure to the benefit of the Lender and its successors and
assigns.
Section 8. Counterparts. This First Amendment may be
executed in two or more counterparts, and it shall not be
necessary that the signatures of all parties hereto be contained
on any one counterpart hereof, each counterpart shall be deemed
an original, but all of which when taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Grantor and the Lender have caused
this Agreement to be duly executed as of the date first above
written.
WITNESSES: GRANTOR:
THE EXPLORATION COMPANY
OF LOUISIANA, INC.
_________________________ By:________________________________
Name:____________________ Name:___________________________
(Please Print)
Title:__________________________
_________________________
Name:____________________
(Please Print)
LENDER:
___________________________________
_________________________ By:________________________________
Name:____________________ Name:___________________________
(Please Print)
Title:__________________________
_________________________
Name:____________________
(Please Print)