FOURTH AMENDMENT TO AND ASSUMPTION OF SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO AND ASSUMPTION OF SECURITY
AGREEMENT ("Fourth Amendment") dated as of September 30, 1999, is
made between XCL-Texas, Inc. ("XCL-Texas") and Construction
Specialists, Inc. d/b/a Con-Spec, Inc. ("Lender"), who agree as
follows:
Recitals
WHEREAS, XCL Land, Ltd. ("XCL Land") and the Lender
entered into that certain Security Agreement dated November 6,
1998, as amended by that certain First Amendment to Security
Agreement dated January 15, 1999, as amended by that certain
Second Amendment to Security Agreement dated as of April 13,
1999, as amended by that certain Third Amendment to Security
Agreement dated as of May 21, 1999 (the "Security Agreement") in
order to secure the full and punctual payment and performance of
the indebtedness described therein (capitalized terms used but
not defined herein shall have the meaning given to them in the
Security Agreement); and
WHEREAS, pursuant to Section 11 of the Security
Agreement, the Lender agreed that in the event additional Units
were sold or additional New Funds were provided to XCL Land by
persons other than Lender and secured by partnership interests in
the Partnership, Lender would immediately upon demand (one or
more times, as appropriate) execute further amendments to the
Security Agreement releasing a percentage of XCL Land's
Partnership Interest sufficient to allocate the security
interests in the partnership interest of the Partnership 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); and
WHEREAS, an additional $1,500,000 in New Funds has been
provided to XCL Land thereby making the aggregate principal
amount of New Funds outstanding as of September 30, 1999 equal to
$4,200,000 with Lender having contributed $950,000 of such funds;
and
WHEREAS, XCL-Texas has requested that Lender execute
this Fourth Amendment to release a portion of its security
interest and amend the Security Agreement to reflect the Lender's
revised security interest; and
WHEREAS, XCL Land assigned a 1% general partnership
interest in the Partnership to XCL-Texas and withdrew as general
partner of the Partnership; and
WHEREAS, XCL Land's remaining partnership interest was
converted to a limited partnership interest and, thereafter, XCL
Land merged with and into The Exploration Company of Louisiana,
Inc. ("TECLI"); and
WHEREAS, as a result of the merger, TECLI succeeded by
operation of law to all of the assets and liabilities of XCL
Land, including but not limited to the Note; and
WHEREAS, as a further result of the merger, TECLI owns
a 99% limited partnership interest in the Partnership and has
acknowledged and agreed that Lender's security interest in
TECLI's partnership interest covers Lender's applicable
percentage of TECLI's entire 99% limited partnership interest;
and
WHEREAS, XCL-Texas wishes to acknowledge Lender's
security interest in Lender's applicable percentage of XCL-Texas'
1% general partnership interest and assume all of XCL-Land's
obligations under the Security Agreement.
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. Substitution of Parties. Lender and
XCL-Texas hereby agree that the Security Agreement, as amended
hereby, is now between Lender and XCL-Texas and XCL-Texas hereby
assumes all of XCL Land's obligations under the Security
Agreement.
Section 2. Partial Release of Collateral. Lender
hereby releases the following collateral:
(1) 12.58% of XCL-Texas' now owned or hereafter acquired
Partnership Interest in the Partnership;
(2) 12.58% of any and all monies and other distributions (cash
or property), allocations or payments made or to be made to XCL-
Texas pursuant to the Partnership Agreement or attributable to
the Partnership Interest;
(3) all General Intangibles related in any way to the collateral
described in clauses 1 or 2 above;
(4) all Proceeds and products of all or any of the collateral
described in clauses 1-3 above.
Section 3. Amendments to Security Agreement. The
Security Agreement is hereby amended as follows:
(a) The reference to "XCL Land, Ltd. ("Borrower")"
in the first sentence of the Security Agreement is hereby changed
to "XCL-Texas, Inc. ("XCL-Texas")."
(b) The references to "The Borrower," "the
Borrower" and "Borrower" in Recital paragraph A, in the
definition of "New Funds," in the definition of "Permitted
Liens," in the definition of "Subscription Agreement," in the
first two places those terms appear in Section 2(A), and in the
first two places those terms appear in the sentence in Section 11
that begins "Lender further agrees and acknowledges" are hereby
changed to "The Exploration Company of Louisiana, Inc."
(c) The references to "The Borrower," "the
Borrower" and "Borrower" in all other places in the Security
Agreement are hereby changed to "XCL-Texas."
(d) The reference to "35.2%" in Section 2(A)(1) and
2(A)(2) is hereby deleted and the phrase "22.62%" is substituted
in its place.
(e) The federal taxpayer identification number
listed in Section 7 of the Security Agreement is hereby changed
to 74-2027391.
(f) The address in Section 8 is hereby amended to
read 3639 Ambassador Caffery Parkway, Suite 400, Lafayette,
Louisiana 70503.
Section 4. Effect of Amendment. Except as expressly
amended hereby and except as to the collateral released pursuant
hereto, the Security Agreement shall remain in full force and
effect.
Section 5. Titles of Sections. All titles or headings
to sections of this Fourth 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 Fourth 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. Counterparts. This Fourth 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, XCL-Texas and the Lender have
caused this Fourth Amendment to be duly executed as of the date
first above written.
WITNESSES: XCL-TEXAS, INC.
_________________________ By:________________________________
Name:____________________ Name:___________________________
(Please Print) Title:__________________________
_________________________
Name:____________________
(Please Print)
LENDER:
CONSTRUCTION SPECIALISTS, INC.
D/B/A CON-SPEC, INC.
_________________________ By:________________________________
Name:____________________ Name:___________________________
(Please Print) Title:__________________________
_________________________
Name:____________________
(Please Print)