HomeMy WebLinkAbout945666
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RECEIVED 3/3/2009 at 4:09 PM
RECEIVING # 945666
BOOK: 716 PAGE: 700
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
MORTGAGE,
ASSIGNMENT, SECURITY AGREEMENT, FIXTURE FILING
AND FINANCING STATEMENT
FROM
DOUBLE EAGLE PETROLEUM CO.
Cðû;70·0
TO
BANK OF OKLAHOMA, N.A., AGENT
Dated February 26, 2009
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES
PAYMENT OF FUTURE ADVANCES, AND COVERS PROCEEDS OF COLLATERAL.
THIS INSTRUMENT COVERS, AMONG OTHER THINGS, (A) GOODS WHICH ARE OR ARE
TO BECOME FIXTURES RELATED TO THE REAL PROPERTY DESCRIBED HEREIN, AND
(B) AS-EXTRACTED COLLATERAL RELATED TO THE REAL PROPERTY DESCRIBED
HEREIN (INCLUDING WITHOUT LIMITATION OIL, GAS AND OTHER MINERALS AND
ACCOUNTS ARISING OUT OF THE SALE AT THE WELLHEAD OR MINEHEAD THEREOF).
THIS INSTRUMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE
REAL ESTATE OR COMPARABLE RECORDS OF THE COUNTIES REFERENCED IN
EXHIBIT A HERETO AND SUCH FILING SHALL SERVE, AMONG OTHER PURPOSES, AS
A FIXTURE FILING AND AS A FINANCING STATEMENT COVERING AS-EXTRACTED
COLLATERAL. THE MORTGAGOR HAS AN INTEREST OF RECORD IN THE REAL
ESTATE CONCERNED, WHICH INTEREST IS DESCRIBED IN SECTION 1.1 OF THIS
INSTRUMENT.
A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE
MAY ALLOW AGENT (AS HEREINAFTER DEFINED) TO TAKE THE MORTGAGED
PROPERTIES AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE
ACTION UPON DEFAULT BY THE MORTGAGOR (AS HEREINAFTER DEFINED) UNDER
THIS MORTGAGE.
WHEN RECORDED OR FILED RETURN TO: THIS DOCUMENT PREPARED BY:
Thompson & Knight L.L.P.
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Attention: Jerry Sanders
Dorothy H. Bjorck
Thompson & Knight L.L.P.
1722 Routh Street, Suite 1500
Dallas, Texas 75201
0056970000002 DALLAS 2454159.2
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Mortgage
MORTGAGE,
ASSIGNMENT, SECURITY AGREEMENT, FIXTURE FILING
AND FINANCING STATEMENT
(this "Mortgage")
ARTICLE 1.
Granting Clauses; Secured Indebtedness
ê·Oû70f,
Section 1.1. Grant and Mortgage. Double Eagle Petroleum Co., a Maryland corporation
(herein called "Mortgagor"), for and in consideration of the sum of One Thousand Dollars
($1000.00) to Mortgagor in hand paid, and in order to secure the payment of the secured
indebtedness hereinafter referred to and the performance ofthe obligations, covenants, agreements,
warranties and undertakings of Mortgagor hereinafter described, does hereby MORTGAGE,
GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN AND SET OVER to Agent with a
POWER OF SALE (pursuant to this Mortgage and applicable law) the entirety of Mortgagor's
interest in and to the following described properties, rights, and interests (the "Mortgaged
Properties") in order to secure the secured indebtedness hereinafter referred to:
A. The oil, gas or other mineral properties, mineral servitudes, and mineral
rights that are described in Exhibit A attached hereto and made a part hereof;
B. Without limitation ofthe foregoing, all other right, title and interest of
Mortgagor of whatever kind or character (whether now owned or hereafter acquired by
operation oflaw or otherwise) in and to (i) the oil, gas or mineral leases or other
agreements described in Exhibit A hereto and (ii) the lands described or referred to in
Exhibit A (or described or referred to in any of the instruments described or referred to in
Exhibit A), without regard to any limitations as to specific lands or depths that may be set
forth in Exhibit A hereto or in any of the leases or other agreements described in Exhibit
A hereto;
C. All of Mortgagor's interest (whether now owned or hereafter acquired by
operation oflaw or otherwise) in and to all presently existing and hereafter created oil,
gas or mineral unitization, pooling or communitization agreements, declarations or
orders, and in and to the properties, rights and interests covered and the units created
thereby (including units formed under orders, rules, regulations or other official acts of
any federal, state or other authority having jurisdiction), which cover, affect or otherwise
relate to the properties, rights and interests described in clause A or B above;
D. All of Mortgagor's interest in and rights under (whether now owned or
hereafter acquired by operation of law or otherwise) all presently existing and hereafter
created operating agreements, equipment leases, production sales contracts, processing
agreements, transportation agreements, gas balancing agreements, farmout or farm-in
agreements, salt water disposal agreements, area of mutual interest agreements, and other
contracts or agreements which cover, affect, or otherwise relate to the properties, rights
and interests described in clause A, B or C above or to the operation of such properties,
0056970000002 DALLAS 2454159.2
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êOG702
rights and interests or to the ~reating, handling, storing, processing, transporting or
marketing of oil, gas, other hydrocarbons, or other minerals produced rrom (or allocated
to) such properties, rights and interests (including those contracts listed in Exhibit A
hereto), as same may be amended or supplemented rrom time to time;
E. All of Mortgagor's interest (whether now owned or hereafter acquired by
operation oflaw or otherwise) in and to all improvements, fixtures, and other real,
personal or property (including all platforms, wells, pumping units, wellhead equipment,
tanks, pipelines, flow lines, gathering lines, compressors, dehydration units, separators,
meters, buildings, injection facilities, salt water disposal facilities, and power, telephone
and telegraph lines), and all easements, servitudes, rights-of-way, surface leases, licenses,
permits and other surface rights, which are now or hereafter used, or held for use, in
connection with the properties, rights and interests described in clause A, B or C above,
or in connection with the operation of such properties, rights and interests, or in
connection with the treating, handling, storing, processing, transporting or marketing of
oil, gas, other hydrocarbons, or other minerals produced from (or allocated to) such
properties, rights and interests; and
F. All rights, estates, powers and privileges appurtenant to the foregoing
rights, interests and properties.
TO HAVE AND TO HOLD the Mortgaged Properties unto Agent, and Agent's successors and
assigns, upon the terms, provisions and conditions herein set forth. Mortgagor will warrant and
defend title to the Property (as hereinafter defined in Section 1.3(h)), free arid clear of all liens,
security interests, and encumbrances except for Permitted Liens (as defined in the Senior Credit
Agreement) against the claims and demands of all persons claiming or to claim the same or any
part thereof.
Section 1.2. Scope of Mortgage. This instrument (this "Mortgage") is a mortgage of both
real and personal property, a security agreement, a financing statement and an assignment, and also
covers goods which are or are to become fixtures, as-extracted collateral, and all proceeds thereof.
Section 1.3. Grant of Security Interest. In order to further secure the payment ofthe secured
indebtedness hereinafter referred to and the performance of the obligations, covenants, agreements,
warranties, and undertakings of Mortgagor hereinafter described, Mortgagor hereby grants to Agent
(as hereinafter defined) a security interest in the entire interest of Mortgagor (whether now owned or
hereafter acquired by operation oflaw or otherwise) in and to:
(a) all oil, gas, other hydrocarbons, and other minerals produced from or
allocated to the Mortgaged Properties and all products processed or obtained thererrom (herein
collectively called the "Production"), together with all accounts arising out of the sale of
Production and all other proceeds of Production (regardless of whether the Production to which
such proceeds relate occurred on, before or after the date hereof), and together with all liens and
security interests securing payment of the proceeds of Production, including those liens and
security interests provided for under (i) statutes enacted in the jurisdictions in which the
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Mortgaged Properties are located, or (ii) statutes made applicable to the Mortgaged Properties
under federal law (or some combination of federal and state law);
(b) without limitation of any other provisions ofthis Section 1.3, all payments
received in lieu of Production (regardless of whether such payments accrued, or the events which
gave rise to such payments occurred on, before or after the date hereof), including "take or pay"
payments and similar payments, payments received in settlement of or pursuant to a judgment
rendered with respect to take or payor similar obligations or other obligations under a production
sales contract, payments received in buyout or buydown or other settlement of a production sales
contract, and payments received under a gas balancing or similar agreement as a result of (or
received otherwise in settlement of or pursuant to judgment rendered with respect to) rights held
by Mortgagor as a result of Mortgagor (or its predecessors in title) taking or having taken less gas
from lands covered by a Mortgaged Property (or lands pooled or unitized therewith) than their
ownership of such Mortgaged Property would entitle them to receive (the payments described in
this subsection (b) being herein called "Payments in Lieu of Production");
( c) all equipment, inventory, improvements, fixtures, accessions, goods, and
other personal property or movable property of whatever nature now or hereafter located on or
used or held for use in connection with the Mortgaged Properties (or in connection with the
operation thereof or the treating, handling, storing, processing, transporting, or marketing of
Production), and all licenses and permits of whatever nature now or hereafter used or held for use
in connection with the Mortgaged Properties (or in connection with the operation thereof or the
treating, handling, storing, processing, transporting, or marketing of Production), and all renewals
or replacements of the foregoing or substitutions for the foregoing;
(d) all accounts, contracts, contract rights, choses in action (i.e., rights to
enforce contracts or to bring claims thereunder) and general intangibles of any kind (regardless of
whether the same arose, or the events which gave rise to the same occurred, on or before or after
the date hereof) in any way related to the Mortgaged Properties, the operation thereof (whether
Mortgagor is operator or non-operator or otherwise), or the treating, 'handling, separation,
stabilization, storing, processing, transporting, gathering, sale or marketing of Production
(including any of the same relating to payment of proceeds of Production or to payment of
amounts which could constitute Payments in Lieu of Production); provided, however, that if the
grant of a security interest in any such contract is prohibited thereunder and the violation of such
prohibition would cause Mortgagor to lose its interest in or rights with respect to such contract,
Mortgagor shall be deemed not to have granted such security interest in such contract to the extent
that such prohibition is enforceable and applicable;
(e) without limitation of the generality of the foregoing, any rights and interests
of Mortgagor under any Hedging Contract now or hereafter existing;
(f) all geological, geophysical, engineering, accounting, title, legal, and other
technical or business data concerning the Mortgaged Properties, the Production or any other item
of Property (as hereinafter defined) which are now or hereafter in the possession of Mortgagor or
in which Mortgagor can otherwise grant a security interest, and all books, files, records, magnetic
media, and other forms of recording or obtaining access to such data;
0056970000002 DALLAS 2454159,2
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(g) without limitation of or by any of the foregoing, all rights, titles and
interests· now owned or hereafter acquired by Mortgagor in any and all goods, inventory,
equipment, as-extracted collateral, documents, money, instruments, intellectual property,
certificated securities, uncertificated securities, investment property, letters of credit, rights to
proceeds of written letters of credit and other letter-of-credit rights, commercial tort claims,
deposit accounts, payment intangibles, general intangibles, contract rights, chattel paper
(including electronic chattel paper and tangible chattel paper), rights to payment evidenced by
chattel paper, software, supporting obligations and accounts, wherever located, and all rights and
privileges with respect thereto (all ofthe properties, rights and interests described in subsections
(a), (b), (c), (d), (e), and (f) above, subsection (h) below, and this subsection (g) being herein
sometimes collectively called the "Collateral"); and
(h) all proceeds ofthe Collateral (the Mortgaged Properties, the Collateral and
the proceeds of the Mortgaged Properties and of the Collateral being herein sometimes
collectively called the "Property").
Except as otherwise expressly provided in this Mortgage, all tenns in this Mortgage relating to
the Collateral and the grant of the foregoing security interest which are defined in the DCC, as
defined below, shall have the meanings assigned to them in Article 9 (or, absent definition in
Article 9, in any other Article) of the DCC, as those meanings may be amended, revised or
replaced from time to time. Notwithstanding the foregoing, the parties intend that the tenns used
herein which are defined in the DCC have, at all times, the broadest and most inclusive meanings
possible. Accordingly, if the DCC shall in the future be amended or held by a court to define any
tenn used herein more broadly or inclusively than the DCC in effect on the date of this Mortgage,
then such tenn, as used herein, shall be given such broadened meaning. If the DCC shall in the
future be amended or held by a court to define any tenn used herein more narrowly, or less
inclusively, than the DCC in effect on the date of this Mortgage, such amendment or holding
shall be disregarded in defining tenns used in this Mortgage.
Section 1.4. Loan Documents, Hedging Obligations, and Other Obligations. This Mortgage
is made to secure and enforce the payment and perfonnance of the. following obligations,
indebtedness, loans, and liabilities:
(a) All indebtedness and other obligations of Mortgagor now or hereafter
incurred or arising pursuant to the provisions of that certain Credit Agreement of even date
herewith among Mortgagor, Bank of Oklahoma, N.A., individually and in its capacity as
Administrative Agent and collateral agent for the benefit of the Lenders (in such capacity herein
called "Agent"), and the lenders from time to time parties thereto (herein called "Lenders") and
all supplements thereto and amendments or modifications thereof, and all agreements given in
substitution therefor or in restatement, renewal or extension thereof, in whole or in part (such
Credit Agreement as the same may from time to time be supplemented, amended or modified, and
all other agreements given in substitution therefor or in restatement, renewal or extension thereof,
in whole or in part, being herein called the "Credit Agreement");
(b) The "Loans" (as defined in the Credit Agreement and used with the same
meaning herein) in the aggregate amount of$75,000,000 that may be made from time to time by
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Lenders to Mortgagor pursuant to the Credit Agreement, and all promissory notes evidencing such
Loans, bearing interest as provided in the Credit Agreement and having a final maturity date on or
before July 31, 2010, unless otherwise extended pursuant to the Credit Agreement or by
amendment thereto;
(c) Payment and performance of all Hedging Obligations;
(d) All other "Obligations", as defined in the Credit Agreement, and all other
indebtedness and other obligations now or hereafter incUlTed or arising pursuant to the provisions
of the Credit Agreement, this Mortgage or any other instrument now or hereafter evidencing,
governing, guaranteeing or securing the "secured indebtedness" (as hereinafter defined) or any
part thereof or otherwise executed in connection with any advance or loan evidenced or governed
by the Credit Agreement (the Credit Agreement, any and all promissory notes issued thereunder,
this Mortgage and such other instruments being herein sometimes collectively called the "Loan
Documents"); and
(e) All costs and expenses of Agent in enforcing its rights and remedies
hereunder.
Without limiting the generality of the foregoing, this Mortgage secures the payment of all amounts
that constitute part of the secured indebtedness and would be owed by Mortgagor to any Lenders
under the Loan Documents but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving Mortgagor.
Section 1.5. Certain Defined Terms.
(a) The indebtedness referred to in Section 1.4, and all renewals, extensions
and modifications thereof, and all substitutions therefor, in whole or in part, are herein sometimes
referred to as the "secured indebtedness" or the "indebtedness secured hereby".
(b) "Applicable Rate" means the Revolving Loan Adjusted Base Rate (as
defined in the Credit Agreement), including any increased rate that is in effect due to an Event of
Default.
( c) "Credit Party" means Mortgagor and each Subsidiary of Mortgagor.
(d) "Hedging Contract" means any written or unwritten agreement now
existing or hereafter entered into that provides for (i) any rate swap transaction, swap option, basis
swap, forward rate transaction, commodity swap or collar, commodity floor, commodity option,
equity or equity index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option, credit protection transaction,
credit swap, credit default swap, credit default option, total return swap, credit spread transaction,
repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities
lending transaction, weather index transaction or forward purchase or sale of a security,
commodity or other financial instrument or interest (including any option with respect to any of
these transactions), (ii) any type of transaction that is similar to any transaction referred to in
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clause (i) above that is aurrently, or in the future becomes, recurrently entered into in the financial
markets (including tenns and conditions incorporated by reference in such agreement) and that is
a forward, swap, future, option or other derivative on one or more rates, currencies, commodities,
equity securities or other equity instruments, debt securities or other debt instruments, economic
indices or measures of economic risk or value, or other benclunarks against which payments or
deliveries are to be made, or (iii) any combination of the foregoing transactions
(e) "Hedging Obligation" means any obligation of any Credit Party arising
from time to time under any Hedging Contract heretofore, presently or hereafter entered into with
a Secured Counterparty; provided that if any Person that was a Secured Counterparty ceases to be
a Secured Counterparty, the Hedging Obligations shall only include such obligations to the extent
arising from transactions entered into during or prior to the time such Person was a Secured
Counterparty and shall not include any obligations arising from any transaction entered into after
such Person ceases to be a Secured Counterparty.
(f) "Indemnified Persons" means Agent and Lenders, their respective
affiliates, and the directors, officers, partners, employees and agents of each of the foregoing.
(g) "Person" means an individual, corporation, general partnership, limited
partnership, limited liability company, association, joint stock company, trust or trustee thereof,
estate or executor thereof, governmental agency or authority, or any other legally recognizable
entity.
(h) "Secured Counterparty" means Agent, any Lender, and any affiliate of
Agent or any Lender.
(i) "Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, or other business or corporate
entity, enterprise or organization which is directly or indirectly (through one or more
intennediaries) controlled by or owned fifty percent or more by such Person, provided that
associations, joint ventures or other relationships (a) which are established pursuant to a standard
fonn operating agreement or similar agreement or which are partnerships for purposes of federal
income taxation only, (b) which are not corporations or partnerships (or sùbject to the Unifonn
Partnership Act) under applicable state law, and (c) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or relationships, shall not be deemed to
be "Subsidiaries" of such Person.
(j) "DCC" means the Unifonn Commercial Code as enacted from time to time
as part of the laws applicable to this Mortgage pursuant to Section 5.22.
ARTICLE II.
Representations, Warranties and Covenants
Section 2.1. Mortgagor represents, warrants, and covenants as follows:
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(a) Title and Liens. Mortgagor has, and Mortgagor covenants to maintain, good
and defensible title to the fee interests in real property and the oil and gas leasehold interests
comprising the Property, in each case free and clear of all liens, security interests, and
encumbrances except for Permitted Liens. The ownership by Mortgagor of the Mortgaged
Properties does and will, with respect to each well or unit identified on Schedule I attached hereto
and made a part hereof, entitle Mortgagor to receive (subject to the terms and provisions of this
Mortgage) a decimal or percentage share of the oil, gas and other hydrocarbons produced from, or
allocated to, such well or unit equal to not less than the decimal or percentage share set forth, for
such well or unit, in the column headed "Net Revenue Interest," ''NRI'' or words of similar import
on Schedule I, and cause Mortgagor to be obligated to bear a decimal or percentage share ofthe
cost of operation of such well or unit equal to not more than the decimal or percentage share set
forth for such well or unit in the column headed "Working Interest," "WI" or words of similar
import on Schedule I. The above-described shares of production which Mortgagor is entitled to
receive and shares of expenses which Mortgagor is obligated to bear are not and will not be
subj ect to change (other than changes which arise pursuant to non-consent provisions of operating
agreements described in Exhibit A in connection with operations hereafter proposed), except, and
only to the extent that, such changes are reflected in Schedule I. There is not and will not be any
unexpired financing statement covering any part of the Property on file in any public office
naming any party other than Agent as secured party and other than Permitted Liens.
(b) No Sale or Disposal Without Consent. Except to the extent expressly
permitted under the Credit Agreement, Mortgagor will not sell, exchange, lease, transfer, release
or otherwise dispose of any part of, or interest in, the Property.
( c) Defense of Mortgage. If the validity or priority of this Mortgage or of any
rights, titles, liens or security interests created or evidenced hereby with respect to the Property or
any part thereof or the title of Mortgagor to the Property shall be endangered or questioned or
shall be attacked directly or indirectly or if any legal proceedings are instituted against Mortgagor
with respect thereto, Mortgagor will give prompt written notice thereof to Agent and at
Mortgagor's own cost and expense will diligently endeavor to cure any defect that may be
developed or claimed, and will take all necessary and proper steps for the defense of such legal
proceedings, including the employment of counsel, the prosecution or defense oflitigation and the
release or discharge of all adverse claims, and Agent (whether or not named as a party to legal
proceedings with respect thereto), is hereby authorized and empowered to take such additional
steps as in their judgment and discretion may be necessary or proper for the defense of any such
legal proceedings or the protection ofthe validity or priority of this Mortgage and the rights, titles,
liens and security interests created or evidenced hereby, including the employment of independent
counsel, the prosecution or defense of litigation, the compromise or discharge of any adverse
claims made with respect to the Property, the purchase of any tax title and the removal of prior
liens or security interests, and all expenditures so made of every kind and character shall be a
demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by
Mortgagor to Agent and shall bear interest from the date expended until paid at the rate described
in Section 2.3 hereof, and the party incurring such expenses shall be subrogated to all rights of the
Person receiving such payment.
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... .
(d) Insurance. Mortgagor will carry insurance as required under the Credit
Agreement. In the event of foreclosure ofthis Mortgage, or other transfer of title to the Property
in extinguishment in whole or in part of the secured indebtedness, all right, title and interest of
Mortgagor in and to such policies then in force concerning the Property and all proceeds payable
thereunder shall, to the maximum extent pennitted under applicable law, thereupon vest in the
purchaser at such foreclosure or other transferee in the event of such other transfer of title.
(e) Further Assurances. Mortgagor will, on request of Agent, (i) promptly
correct any defect, error or omission which may be discovered in the contents of this Mortgage, or
in any other Loan Document, or in the execution or acknowledgment of this Mortgage or any
other Loan Document; and (ii) execute, acknowledge, deliver and record or file such further
instruments (including further deeds of trust, mortgages, security agreements, financing
statements, continuation statements, and assignments of production, accounts, funds, contract
rights, general intangibles, and proceeds) and do such further acts as may be necessary, desirable
or proper to carry out more effectively the purposes of this Mortgage and the other Loan
Documents and to more fully identify and subject to the liens and security interests hereof any
property intended to be covered hereby, including any renewals, additions, substitutions,
replacements, or appurtenances to the Property. Mortgagor shall pay all reasonable costs
connected with any of the foregoing.
(f) Not a Foreign Person. Mortgagor is not a "foreign person" within the
meaning of the Internal Revenue Code of 1986, as amended, (hereinafter called the "Code"),
Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate as those terms are defined in the Code and any
regulations promulgated thereunder).
(g) Payment and Performance. Mortgagor will make due and punctual
payment of all secured indebtedness as the same become due and payable, whether at a date for
payment of a fixed installment, or contingent or other payment, or as a result of acceleration or
otherwise. Mortgagor will timely and properly perform all of its covenants and agreements under
this Mortgage or the Loan Documents and will not permit a default to occur hereunder or
thereunder.
Section 2.2. Compliance by Operator. As to any Mortgaged Property that is not a working
interest, Mortgagor agrees to take all commercially reasonable action and to exercise all rights and
remedies as are reasonably available to Mortgagor to cause the owner or owners of the working
interest in or related to such Mortgaged Property to comply with Mortgagor's covenants and
agreements contained herein with respect to such Mortgaged Property; and as to any part of the
Mortgaged Properties that is a working interest but is operated by a Person other than Mortgagor,
Mortgagor agrees to take all commercially reasonable action and to exercise all rights and remedies as
are reasonably available to Mortgagor (including all rights under any operating agreement) to cause
such Person to comply with Mortgagor's covenants and agreements contained herein with respect to
such Mortgaged Property.
Section 2.3. Performance on Mortgagor's Behalf. Mortgagor agrees that, if Mortgagor fails
to perform any act or to take any action which hereunder Mortgagor is required to perform or take, or
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to pay any money which hereunder Mortgagor is required to pay, Agent, in Mortgagor's name or its
own name, may, but shall not be obligated to, perform or cause to be performed such act or take such
action or pay such money, and any expenses so incurred by Agent and any money so paid by Agent
shall be a demand obligation owing by Mortgagor to Agent (which obligation Mortgagor hereby
expressly promises to pay) and Agent, upon making such payment, shall be subrogated to all ofthe
rights of the Person receiving such payment. Each amount due and owing by Mortgagor to Agent or
any Lender pursuant to this Section 2.3 or other sections of this Mortgage that specifically refer to this
Section 2.3 shall bear interest each day, from the date of such expenditure or payment until paid, at
the Applicable Rate; all such amounts, together with such interest thereon, shall be a part of the
secured indebtedness and shall be secured by this Mortgage.
Section 2.4. Recording. Mortgagor will cause this Mortgage and all amendments and
supplements thereto and substitutions therefor and all financing statements and continuation
statements relating thereto to be recorded, filed, re-recorded and refiled in such manner and in such
places as Agent shall reasonably request and will pay all such recording, filing, re-recording and
refiling taxes, fees and other charges.
Section 2.5. Reporting Compliance. Mortgagor agrees to comply with any and all reporting
requirements applicable to the transactions relating to the secured indebtedness that are set forth in
any law, statute, ordinance, rule, regulation, order or determination of any governmental authority,
and further agrees upon request of Agent to furnish Agent with evidence of such compliance.
Section 2.6. Release of Mortgage; Survival of Indemnities; Reinstatement. If all of the
secured indebtedness shall be paid in full and no further obligation shall exist to provide credit or
advance funds to Mortgagor or the maker of any promissory note secured hereby or any other obligor
that owes secured indebtedness, and if all other requirements in the Credit Agreement for the release
ofthis Mortgage have been satisfied, then, at Mortgagor's request and expense, Agent shall execute a
release of this Mortgage as provided in the Credit Agreement. Notwithstanding any release of this
Mortgage (and whether or not expressly reserved in any instrument of release), the indemnifications
and other rights that this Mortgage or the Credit Agreement contemplate will continue in effect
following the release hereof shall continue in effect unaffected by such release. If any payment of any
secured indebtedness is held to constitute a preference or a voidable transfer under applicable state or
federal laws, or if for any other reason any Lender or Agent is required to refund such payment to the
payor thereof or to pay the amount thereof to any third party, this Mortgage shall be reinstated to the
extent of such payment or payments.
ARTICLE III.
Assignment of Production, Accounts, and Proceeds
Section 3.1. Assignment of Production and Production Proceeds. Mortgagor does hereby
absolutely and unconditionally assign, transfer and set over to Agent (a) all Production and all other
as-extracted collateral that relates or accrues to Mortgagor's interests in the Mortgaged Properties and
(b) all proceeds of the foregoing (including all as-extracted collateral constituting proceeds) and all
Payments in Lieu of Production (which proceeds and Payments in Lieu of Production are herein
collectively called "Production Proceeds"), together with the immediate and continuing right to
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collect and receive such Production Proceeds. Mortgagor directs and instructs any and all purchasers
of any Production to pay to Agent all of the Production Proceeds accruing to Mortgagor's interest
until such time as such purchasers have been furnished with evidence that all secured indebtedness
has been paid and that this Mortgage has been released. Mortgagor agrees that no purchaser of
Production shall have any responsibility for the application of any funds paid to Agent.
Section 3.2. Effectuating Payment of Production Proceeds to Agent. Mortgagor agrees to
execute and deliver any and all transfer orders, division orders and other instruments that may be
requested by Agent or that may be required by any purchaser of any Production for the purpose of
effectuating payment of the Production Proceeds to Agent. If under any existing sales agreements,
other than division orders or transfer orders, any Production Proceeds are required to be paid by the
purchaser to Mortgagor so that under such existing agreements payment cannot be made of such
Production Proceeds to Agent, Mortgagor's interest in all Production Proceeds under such sales
agreements and in all other Production Proceeds which for any reason may be paid to Mortgagor shall,
when received by Mortgagor, constitute trust funds in Mortgagor's hands and shall be immediately
paid over to Agent. Without limitation upon any of the foregoing, Mortgagor hereby constitutes and
appoints Agent as Mortgagor's special attorney-in-fact (with full power of substitution, either
generally or for such periods or purposes as Agent may from time to time prescribe) in the name,
place and stead of Mortgagor to do any and every act and exercise any and every power that
Mortgagor might or could do or exercise personally with respect to all Production and Production
Proceeds (the same having been assigned by Mortgagor to Agent pursuant to Section 3.1 hereof),
expressly including, but not limited to, the right, power and authority to:
(a) Execute and deliver in the name of Mortgagor any and all transfer orders,
division orders, letters in lieu of transfer orders, indemnifications, certificates and other
instruments of every nature that may be requested or required by any purchaser of Production
from any of the Mortgaged Properties for the purposes of effectuating payment of the Production
Proceeds to Agent or that Agent may otherwise deem necessary or appropriate to effect the intent
and purposes of the assignment contained in Section 3.1; and
(b) If under any product sales agreements other than division orders or transfer
orders, any Production Proceeds are required to be paid by the purchaser to Mortgagor so that
under such existing agreements payment cannot be made of such Production Proceeds to Agent,
to make, execute and enter into such sales agreements or other agreements as are necessary to
direct Production Proceeds to be payable to Agent;
giving and granting unto said attorney-in-fact full power and authority to do and perfonn any and
every act and thing whatsoever necessary and requisite to be done as fully and to all intents and
purposes, as Mortgagor might or could do if personally present; and Mortgagor shall be bound
thereby as fully and effectively as if Mortgagor had personally executed, acknowledged and
delivered any of the foregoing certificates or documents. The power of attorney herein conferred
is granted for valuable consideration and hence is coupled with an interest and is irrevocable so
long as the secured indebtedness, or any part thereof, shall remain unpaid. All Persons dealing
with Agent or any substitute shall be fully protected in treating the powers and authorities
conferred by this paragraph as continuing in full force and effect until advIsed by Agent that all
the secured indebtedness is fully and finally paid. Agent may, but shall not be obligated to, take
0056970000002 DALLAS 2454159.2
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such action as it deems appropriate in an effort to collect the Production Proceeds and any
reasonable expenses (including reasonable attorney's fees) so incurred by Agent shall be a
demand obligation of Mortgagor and shall be part ofthe secured indebtedness, and shall bear
interest each day, from the date of such expenditure or payment until paid, at the Applicable
Rate.
Section 3.3. Change of Purchaser. To the extent an Event of Default has occurred and is
continuing, should any Person now or hereafter purchasing or taking Production fail to make payment
promptly to Agent of the Production Proceeds, Agent shall, subject to then existing contractual
prohibitions, have the right to make, or to require Mortgagor to make, a change of purchaser, and the
right to designate or approve the new purchaser, and Agent shall have no liability or responsibility in
connection therewith so long as ordinary care is used in making such designation.
Section 3.4. Application of Production Proceeds. All Production Proceeds received by Agent
shall be applied or held by Agent in accordance with the provisions of the Credit Agreement.
Section 3.5. Release From Liability; Indemnification. Agent and its successors and assigns
are hereby released and absolved from all liability for failure to enforce collection of the Production
Proceeds and from all other responsibility in connection therewith, except the responsibility of each to
account to Mortgagor for funds actually received by each. Mortgagor agrees to indemnify and hold
harmless each Indemnified Person from and against all claims, demands, liabilities, losses, damages
(including consequential damages), causes of action, judgments, penalties, costs and expenses
(including reasonable attorneys' fees and expenses) imposed upon, asserted against or incurred or paid
by any Indemnified Person by reason of the assertion that any Indemnified Person received, either
before or after payment in full of the secured indebtedness, Production Proceeds or other funds
claimed by third Persons (or funds attributable to sales of Production which (i) were made at prices in
excess of the maximum price permitted by applicable law or (ii) were otherwise made in violation of
laws, rules, regulations or orders governing such sales), and Agent shall have the right to defend
against any such claims or actions, for the benefit of itself and the other Indemnified Persons,
employing attorneys of its own selection, and if not furnished with indemnity satisfactory to Agent,
each Indemnified Person shall have the right to compromise and adjust any such claims, actions and
judgments, and in addition to the rights to be indemnified as herein provided, all amounts paid by any
Indemnified Person in compromise, satisfaction or discharge of any such claim, action or judgment,
and all court costs, attorneys' fees and other expenses of every character expended by any Indemnified
Person pursuant to the provisions of this section shall be a demand obligation (which obligation
Mortgagor hereby expressly promises to pay) owing by Mortgagor and payable to Agent for the
benefit ofthe Indemnified Persons and shall bear interest, from the date expended until paid, at the
Applicable Rate. The foregoing indemnities shall not terminate upon the release, foreclosure or other
termination of this Mortgage but will survive such release, foreclosure of this Mortgage or
conveyance in lieu offoreclosure, or other termination, and the repayment of the secured indebtedness
and the discharge and release of this Mortgage and the other documents evidencing or securing the
secured indebtedness. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE
INTENTION OF MORTGAGOR, AND MORTGAGOR AGREES, THAT THE
FOREGOING RELEASES AND INDEMNITIES SHALL APPLY FOR THE BENEFIT OF
EACH INDEMNIFIED PERSON WITH RESPECT TO ALL CLAIMS, DEMANDS,
0056970000002 DALLAS 2454159.2
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LIABILITIES, LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES),
CAUSES OF ACTION, JUDGMENTS, PENAL TIES, COSTS AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES) WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF ANY
INDEMNIFIED PERSON, PROVIDED THAT SUCH INDEMNITIES SHALL NOT APPLY
TO ANY PARTICULAR INDEMNIFIED PERSON (BUT SHALL APPLY TO THE OTHER
INDEMNIFIED PERSONS) TO THE EXTENT SUCH CLAIMS, DEMANDS, LIABILITIES,
LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES), CAUSES OF
ACTION, JUDGMENTS, PENALTIES, COSTS AND EXPENSES ARE CAUSED BY THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTICULAR
INDEMNIFIED PERSON.
Section 3.6. Mortgagor's Absolute Obligation to Pay Loans. Nothing herein contained shall
detract from or limit the obligations of Mortgagor to pay the secured indebtedness in accordance with
the terms thereof, regardless ofwhether the Production and Production Proceeds herein assigned are
sufficient to pay the same, and the rights under this Article III shall be cumulative of all other rights
under the Loan Documents.
ARTICLE IV.
Remedies Upon Default
Section 4.1. Event of Default. The tenl1 "Event of Default" as used in this Mortgage means
an "Event of Default" as defined in the Credit Agreement.
Section 4.2. Acceleration of Secured Indebtedness. The maturity ofthe secured indebtedness
may be (and in certain circumstances shall automatically be) accelerated as provided in the Credit
Agreement.
Section 4.3. Pre-Foreclosure Remedies. Upon the occurrence and during the continuance of
an Event of Default, Agent is authorized, prior or subsequent to the institution of any foreclosure
proceedings, to enter upon the Property, or any part thereof, and to take possession of the Property and
all books and records relating thereto, and to exercise without interference from Mortgagor any and all
rights which Mortgagor has with respect to the management, possession, operation, protection or
preservation of the Property. If necessary to obtain the possession provided for above, Agent may
invoke any and all remedies to dispossess Mortgagor. Mortgagor agrees to peacefully surrender
possession of the Property if requested by Agent. All costs, expenses and liabilities of every character
incurred by Agent in managing, operating, maintaining, protecting or preserving the Property shall
constitute a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to Agent and shall bear interest from date of expenditure until paid at the Applicable
Rate, all of which shall constitute a portion of the secured indebtedness and shall be secured by this
Mortgage and by any other instrument securing the secured indebtedness. In connection with any
action taken by Agent pursuant to this Section 4.3, AGENT SHALL NOT BE LIABLE FOR ANY
0056970000002 DALLAS 2454159.2
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LOSS SUSTAINED BY MORTGAGOR OR ANY AFFILIATE OF MORTGAGOR
RESULTING FROM ANY ACT OR OMISSION BY AGENT (INCLUDING AGENT'S OWN
NEGLIGENCE) IN MANAGING THE PROPERTY, EXCEPT TO THE EXTENT SUCH
LOSS IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
AGENT, nor shall Agent be obligated to perfonn or discharge any obligation, duty or liability of
Mortgagor arising under any agreement fonning a part ofthe Property or arising under any Pennitted
Lien or otherwise arising. Mortgagor hereby assents to, ratifies and confinns any and all actions of
Agent with respect to the Property taken under this Section 4.3, other than gross negligence, willful
misconduct, or bad faith of Agent.
Section 4.4. Foreclosure.
(a) Upon the occurrence and during the continuance of a default, Agent may (i)
foreclose this Mortgage by judicial action, or (ii) sell the Mortgaged Properties, or any part
thereof, pursuant to the power of sale granted to Agent under this Mortgage, either as an entirety
or in parcels as Agent may elect, at such place or places and otherwise in the manner and upon
such notice as may be required by law or, in the absence of any such requirement, as Agent may
deem appropriate. If Agent shall have given notice of sale hereunder, any successor or substitute
Agent thereafter appointed may complete the sale and the conveyance of the property pursuant
thereto as if such notice had been given by the successor or substitute Agent conducting the sale.
A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER
OF SALE MAY ALLOW AGENT TO TAKE THE MORTGAGED PROPERTIES
AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE
ACTION UPON DEFAULT BY MORTGAGOR UNDER THIS MORTGAGE.
(b) Upon the occurrence and during the continuance of a default, Agent may
exercise its rights of enforcement with respect to the Collateral under the Unifonn Commercial
Code of the State of Wyoming or any other statute in force in any state to the extent the same is
applicable law. Cumulative of the foregoing and the other provisions of this Section 4.4:
(i) Agent may enter upon the Mortgaged Properties or otherwise upon
Mortgagor's premises to take possession of, assemble and collect the Collateral or to render
it unusable; and
(ii) Agent may require Mortgagor to assemble the Collateral and make it
available at one or more places reasonably designated by Agent to allow Agent to take
possession or dispose of the Collateral; and
(iii) written notice mailed to Mortgagor as provided herein at least ten (10)
days prior to the date of public sale of the Collateral or prior to the date after which private
sale of the Collateral will be made shall constitute reasonable notice; and
(iv) in the event of a foreclosure ofthe liens or security interests created or
evidenced hereby, the Collateral, or any part thereof, and the Mortgaged Properties, or any
0056970000002 DALLAS 2454159.2
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part thereof, may, at the option of Agent, be sold, as a whole or in parts, together or
separately (including where a portion of the Mortgaged Properties is sold, the Collateral
related thereto may be sold in connection therewith); and
(v) the expenses of sale provided for in clause FIRST of Section 4.7 shall
include the reasonable expenses of retaking the Collateral, or any part thereof, holding the
same and preparing the same for sale or other disposition; and
(vi) should, under this subsection, the Collateral be disposed of other than
by sale, any proceeds of such disposition shall be treated under Section 4.7 as if the same
were sales proceeds.
(c) To the extent pennitted by applicable law, the sale hereunder ofless than
the whole of the Property shall not exhaust the powers of sale herein granted or the right to
judicial foreclosure, and successive sale or sales may be made until the whole ofthe Property shall
be sold, and, if the proceeds of such sale of less than the whole of the Property shall be less than
the aggregate of the indebtedness secured hereby, this Mortgage and the liens and security
interests hereof shall remain in full force and effect as to the unsold portion ofthe Property just as
though no sale had been made; provided, however, that Mortgagor shall never have any right to
require the sale of less than the whole of the Property. In the event any sale hereunder is not
completed or is defective in the opinion of Agent, such sale shall not exhaust the powers of sale
hereunder or the right to judicial foreclosure, and Agent shall have the right to cause a subsequent
sale or sales to be made. Any sale may be adjourned by announcement at the time and place
appointed for such sale without further notice except as may be required by law. Agent acting
under power of sale may appoint or delegate anyone or more Persons as agent to perfonn any act
or acts necessary or incident to any sale (including the posting of notice~ and the conduct of sale),
and such appointment need not be in writing or recorded. Any and all statements of fact or other
recitals made in any deed or deeds, or other instruments of transfer, given in connection with a
sale as to nonpayment of the secured indebtedness or as to the occurrence of any Event of Default,
or as to all of the secured indebtedness having been declared to be due and payable, or as to the
request to sell, or as to notice of time, place and tenns of sale and the properties to be sold having
been duly given by Agent,. Notwithstanding any reference herein to the Credit Agreement or any
other Loan Document, all Persons dealing with the Mortgaged Properties shall be entitled to rely
on any document, or certificate, of Agent as to the occurrence of any event or the satisfaction of
any condition, such as the existence of an Event of Default, and shall not be charged with or
forced to review any provision of this Mortgage or any other document to detennine the accuracy
thereof. With respect to any sale held in foreclosure of the liens or security interests covered
hereby, it shall not be necessary for Agent, any public officer acting under execution or order of
the court or any other party to have physically present or constructively in his/her or its
possession, either at the time of or prior to such sale, the Property or any part thereof.
Section 4.5. Receiver. In addition to all other remedies herein provided for, Mortgagor
agrees that, upon the occurrence and during the continuance of an Event of Default, Agent shall as a
matter of right be entitled to the appointment of a receiver or receivers for all or any part of the
Property, whether such receivership be incident to a proposed sale (or sales) of such property or
otherwise, and without regard to the value of the Property or the solvency of any Person or Persons
0056970000002 DALLAS 2454159.2
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(;'Ov71~
liable for the payment ofthe indebtedness secured hereby, and Mortgagor does hereby consent tõtIíe
appointment of such receiver or receivers, waives any and all defenses to such appointment, and
agrees not to oppose any application therefor by Agent, and agrees that such appointment shall in no
manner impair, prejudice or otherwise affect the rights of Agent under Article III hereof. Mortgagor
expressly waives notice of a hearing for appointment of a receiver and the necessity for bond or an
accounting by the receiver. Nothing herein is to be construed to deprive Agent or any Lender of any
other right, remedy or privilege it may now or hereafter have under the law to have a receiver
appointed. Any money advanced by Agent in connection with any such receivership shall be a
demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by
Mortgagor to Agent and shall bear interest, from the date of making such advancement by Agent until
paid, at the Applicable Rate.
Section 4.6. Proceeds of Foreclosure. The proceeds of any sale held in foreclosure of the
liens or security interests created or evidenced hereby shall be applied:
FIRST, to the payment of all costs and expenses incident to such foreclosure sale,
including all court costs and charges of every character in the event foreclosed by suit or any
judicial proceeding;
SECOND, to the payment of the secured indebtedness in accordance with the Credit
Agreement (or to be held as cash collateral in accordance therewith); and
THIRD, the remainder, if any there shall be, shall be paid to Mortgagor, or to
Mortgagor's heirs, devisees, representatives, successors or assigns, or such other Persons as
may be entitled thereto by law.
Section 4.7. Lender as Purchaser. Any Lender (or any Lenders acting together) shall have the
right to become the purchaser at any sale held in foreclosure of the liens or security interests created
or evidenced hereby, and any Lender purchasing at any such sale shall have the right to credit upon
the amount of the bid made therefor, to the extent necessary to satisfy such bid, the secured
indebtedness owing to such Lender, or if such Lender holds less than all of such indebtedness, the pro
rata part thereof owing to such Lender, accounting to all other Lenders not joining in such bid in cash
for the portion of such bid or bids apportionable to such non-bidding Lender or Lenders.
Section 4.8. Foreclosure as to Matured Debt. Upon the occurrence and during the
continuance of an Event of Default, Agent shall have the right to proceed with foreclosure ofthe liens
or security interests created or evidenced hereby without declaring the entire secured indebtedness
due, and in such event, any such foreclosure sale may be made subject to the unmatured part of the
secured indebtedness and shall not in any manner affect the unmatured part of the secured
indebtedness, but as to such unmatured part, this Mortgage shall remain in full force and effect just as
though no sale had been made. The proceeds of such sale shall be applied as provided in Section 4.7
except that the amount paid under claµseSECOND thereof shall be only the matured portion of the
secured indebtedness and any proceeds of such sale in excess of those provided for in clauses FIRST
and SECOND (modified as provided above) shall be applied or held as provided in Section 3.4.
Several sales may be made hereunder without exhausting the right of sale for any unmatured part of
the secured indebtedness.
0056970000002 DALLAS 2454159.2
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Section 4.9. Remedies Cumulative. All remedies herein provided for are cumulative of each
other and of all other remedies existing at law or in equity and are cumulative of any and all other
remedies provided for in any other Loan Document, and, in addition to the remedies herein provided,
there shall continue to be available all such other remedies as may now or hereafter exist at law or in
equity for the collection of the secured indebtedness and the enforcement of the covenants herein and
the foreclosure of the liens or security interests created or evidenced hereby, and the resort to any
remedy provided for hereunder or under any such other Loan Document or provided for by law shall
not prevent the concurrent or subsequent employment of any other appropriate remedy or remedies.
Section 4.10. Discretion as to Security. Agent may resort to any security given by this
Mortgage or to any other security now existing or hereafter given to secure the payment ofthe secured
indebtedness, in whole or in part, and in such portions and in such order as may seem best to Agent in
its sole and absolute discretion, and any such action shall not in any way be considered as a waiver of
any of the rights, benefits, liens or security interests created or evidenced by this Mortgage.
Section 4.11. Mortgagor' s Waiver of Certain Rights. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead, claim or take the benefit
or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay,
extension or redemption, and Mortgagor, for Mortgagor, Mortgagor's heirs, devisees, representatives,
successors and assigns, and for any and all Persons ever claiming any interest in the Property, to the
extent pennitted by applicable law, hereby waives and releases all rights of appraisement, valuation,
stay of execution, redemption, notice of intention to mature or declare due the whole of the secured
indebtedness, notice of election to mature or declare due the whole ofthe secured indebtedness and all
rights to a marshaling of assets of Mortgagor, including the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the liens or security interests hereby created. Mortgagor shall
not have or assert any right under any statute or rule oflaw pertaining to the marshaling of assets, sale
in inverse order of alienation, the exemption of homestead, the administration of estates of decedents,
or other matters whatever to defeat, reduce or affect the right under the tenns of this Mortgage to a
sale ofthe Property for the collection ofthe secured indebtedness without any prior or different resort
for collection, or the right under the tenns of this Mortgage to the payment of the secured
indebtedness out of the proceeds of sale of the Property in preference to every other claimant
whatever. If any law referred to in this section and now in force, of which Mortgagor or Mortgagor's
heirs, devisees, representatives, successors or assigns or any other Persons claiming any interest in the
Mortgaged Properties or the Collateral might take advantage despite this section, shall hereafter be
repealed or cease to be in force, such law shall not thereafter be deemed to preclude the application of
this section.
Section 4.12. Mortgagor as Tenant Post-Foreclosure. In the event there is a foreclosure sale
hereunder and at the time of such sale Mortgagor or Mortgagor's representatives, successors or
assigns or any other Persons claiming any interest in the Property by, through or under Mortgagor are
occupying or using the Property, or any part thereof, each and all shall immediately become the tenant
of the purchaser at such sale, which tenancy shall be a tenancy trom day to day, tenninab1e at the will
of either landlord or tenant, at a reasonable rental per day based upon the value of the property
occupied, such rental to be due daily to the purchaser. To the extent pennitted by applicable law, the
purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the
sole option to demand immediate possession following the sale or to pennit the occupants to remain
0056970000002 DALLAS 2454159.2
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as tenants at will. In the event the tenant fails to surrender possession of said property upon demand,
the purchaser shall be entitled to institute and maintain a summary action for possession of the
property (such as an action for forcible entry and detainer) in any court having jurisdiction.
ARTICLE V.
Miscellaneous
Section 5.1. Effective as a Financing Statement. The Property includes as-extracted
collateral and includes goods which are or are to become fixtures on the real property described
herein. This Mortgage shall be effective as a financing statement covering fixtures and as-extracted
collateral (including oil and gas, other minerals and other substances ofvalue which may be extracted
from the earth and accounts related thereto), and this Mortgage is to be filed for record in the real
property records, or other appropriate records of each county where any part of the Mortgaged
Properties is situated and may also be filed in the offices of the Bureau of Land Management or any
other relevant federal, state or local agency or office (or any successor agencies or offices). This
Mortgage shall also be effective as a financing statement covering any other Property and may be filed
in any other appropriate filing or recording office. The mailing address of Mortgagor is the address of
Mortgagor set forth at the end of this Mortgage and the address of Agent from which information
concerning the security interests hereunder may be obtained is the address of Agent set forth at the
end ofthis Mortgage. A carbon, photographic, facsimile or other reproduction ofthis Mortgage shall
be sufficient as a financing statement for all purposes.
Section 5.2. Authority to File Financing Statements. Without limiting any other provision
herein, Mortgagor hereby authorizes Agent to file one or more financing statements, or renewal or
continuation statements thereof, describing the Collateral as Agent deems appropriate (including any
such financing statement, renewal or continuation statement that describes the Collateral as "all
assets" or "all personal property" of Mortgagor).
Section 5.3. Notice to Account Debtors. In addition to, but without limitation of, the rights
granted in Article III hereof, Agent may at any time notify the account debtors or obligors of any
accounts, chattel paper, negotiable instruments or other evidences of indebtedness included in the
Collateral to pay Agent directly.
Section 5.4. Waivers. As provided in the Credit Agreement, Agent or Lenders may at any
time and from time to time in writing waive compliance by Mortgagor with any covenant herein made
by Mortgagor to the extent and in the manner specified in such writing, or consent to Mortgagor's
doing any act which hereunder Mortgagor is prohibited from doing, or to Mortgagor's failing to do
any act which hereunder Mortgagor is required to do, to the extent and in the manner specified in such
writing, or release any part of the Property or any interest therein or any Production Proceeds from the
lien and security interest of this Mortgage. Any party liable, either directly or indirectly, for the
secured indebtedness or for any covenant herein or in any other Loan Document may be released from
all or any part of such obligations without impairing or releasing the liability of any other party. No
such act shall in any way impair any rights or powers hereunder except to the extent specifically
agreed to in such writing.
0056970000002 DALLAS 2454159.2
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Section 5.5. No Impairment ofSecuritv. The lien, security interest and other security rights
hereunder shall not be impaired by any indulgence, moratorium or release, or any renewal, extension
or modification, which may be granted with respect to any secured indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which may be granted in respect of
the Property (including Production Proceeds), or any part thereof or any interest therein, or any release
or indulgence granted to any endorser, guarantor or surety of any secured indebtedness.
Section 5.6. Acts Not Constituting Waiver. Any Event of Default maybe waived without
waiving any other prior or subsequent Event of Default. Any Event of Default may be remedied by
Agent or a Lender without constituting a waiver of the Event of Default remedied. Neither failure to
exercise, nor delay in exercising, any right, power or remedy upon any Event of Default shall be
construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right,
power or remedy at a later date. No single or partial exercise of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or further exercise thereof, and every such right,
power or remedy hereunder may be exercised at any time and from time to time. No modification or
waiver of any provision hereof nor consent to any departure by Mortgagor therefrom shall in any
event be effective unless the same shall be in writing and signed by Agent and then such waiver or
consent shall be effective only in the specific instances, for the purpose for which given and to the
extent therein specified. No notice to nor demand on Mortgagor in any case shall of itself entitle
Mortgagor to any other or further notice or demand in similar or other circumstances. Acceptance of
any payment in an amount less than the amount then due on any secured indebtedness shall be
deemed an acceptance on account only and shall not in any way excuse the existence of an Event of
Default.
Section 5.7. Mortgagor's Successors. In the event the ownership of the Property or any part
thereof becomes vested in a Person other than Mortgagor, then, without notice to Mortgagor, such
successor or successors in interest may be dealt with, with reference to this Mortgage and to the
indebtedness secured hereby, in the same manner as with Mortgagor, without in any way vitiating or
discharging Mortgagor's liability hereunder or for the payment of the indebtedness or performance of
the obligations secured hereby. No transfer of the Property, no forbearance, and no extension ofthe
time for the payment of the indebtedness secured hereby shall operate to release, discharge, modify,
change or affect, in whole or in part, the liability of Mortgagor hereunder or for the payment ofthe
indebtedness or performance of the obligations secured hereby or the liability of any other Person
hereunder or for the payment of the indebtedness secured hereby.
l
Section 5.8. Application of Payments to Certain Indebtedness. If any part of the secured
indebtedness cannot be lawfully secured by this Mortgage or if any part of the Property cannot be
lawfully subject to the lien and security interest hereofto the full extent of such indebtedness, then all
payments made shall be applied on said indebtedness first in discharge ofthat portion thereof which is
not secured by this Mortgage.
Section 5.9. Compliance With USUry Laws. It is the intent of Mortgagor, Agent, Lenders and
all other parties to the Loan Documents to contract in strict compliance with applicable usury law
from time to time in effect. In furtherance thereof, it is stipulated and agreed that, as more fully
provided in the Credit Agreement, none of the terms and provisions contained herein shall ever be
construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess
0056970000002 DALLAS 2454159.2
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of the maximum amount of interest permitted to be collected, charged, taken, reserved, orreceived by
applicable law from time to time in effect.
Section 5.10. Notices. All notices, requests, consents, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed sufficiently given or furnished
if delivered in compliance with the Credit Agreement. Notwithstanding the foregoing, or anything
else in the Loan Documents which may appear to the contrary, any notice given in connection with a
foreclosure of the liens or security interests created hereunder, or otherwise in connection with the
exercise by Agent or any Lender of their respective rights hereunder or under any other Loan
Document, which is given in a manner permitted by applicable law shall constitute proper notice, and,
without limitation of the foregoing, notice given in a form required or permitted by statute shall (as to
the portion of the Property to which such statute is applicable) constitute proper notice.
Section 5.11. Invaliditv of Certain Provisions. A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or validity of any other
provision and the determination that the application of any provision of this Mortgage to any Person
or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other Persons or circumstances.
Section 5.12. Interpretation, etc. All references in this Mortgage to Exhibits, Schedules,
articles, sections, subsections, definitions and other subdivisions refer to the Exhibits, Schedules,
articles, sections, subsections, definitions and other subdivisions of this Mortgage unless expressly
provided otherwise. References to any document, instrument, or agreement (a) shall include all
exhibits, schedules, and other attachments thereto, and (b) shall include all amendments, supplements
or restatements thereof. Titles appearing at the beginning of any subdivisions hereof are for
convenience only and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this Mortgage", "this
instrument", "herein", "hereof', "hereby", "hereunder" and words of similar import refer to this
Mortgage as a whole and not to any particular subdivision unless expressly so limited. The phrases
"this section" and "this subsection" and similar phrases refer only to the sections or subsections
hereof in which such phrases occur. The word "or" is not exclusive, and the word "including" (in its
various forms) means "including without limitation". References to a Person's "discretion" means its
sole and absolute discretion. Pronouns in masculine, feminine and neuter genders shall be construed
to include any other gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires. Unless otherwise specified, references herein to
any particular Person also refer to its successors and permitted assigns. This Mortgage has been
reviewed and negotiated by sophisticated parties with access to legal counsel and no rule of
construction shall apply hereto or thereto which would require or allow this Mortgage to be construed
against any party because of its role in drafting this Mortgage.
Section 5.13. Certain Consents. Except where otherwise expressly provided herein, in any
instance hereunder where the approval, consent or the exercise of judgment of Agent or any Lender is
required, the granting or denial of such approval or consent and the exercise of such judgment shall be
within the sole discretion of such party, and such party shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any particular manner,
regardless of the reasonableness of either the request or the judgment of such party.
0056970000002 DALLAS 2454159.2
20
Mortgage
00ú720
Section 5.14. Authority of Agent. Agent and Lenders may, by agreement among themselves,
provide for and regulate the exercise of rights and remedies hereunder, but, unless and until modified
to the contrary in writing signed by all such Persons and recorded in the same counties or parishes as
this Mortgage is recorded, (i) all Persons other than Mortgagor and its affiliates shall be entitled to
rely on the releases, waivers, consents, approvals, notifications and other acts of Agent (including the
bidding in of all or any part of the secured indebtedness held by anyone or more Lenders, whether the
same be conducted under the provisions hereof or otherwise), without inquiry into any such
agreements or the existence of required consent or approval of any Persons constituting Lenders and
without the joinder of any party other than Agent in such releases, waivers, consents, approvals,
notifications or other acts and (ii) all notices, requests, consents, demands and other communications
required or permitted to be given hereunder may be given to Agent.
Section 5.15. Counterparts. This Mortgage may be executed in several counterparts, all of
which are identical, except that, to facilitate recordation, certain counterparts hereof may include only
that portion of Exhibit A which contains descriptions ofthe properties located in (or otherwise subject
to the recording or filing requirements or protections ofthe recording or filing acts or regulations of)
the recording jurisdiction in which the particular counterpart is to be recorded, and other portions of
Exhibit A shall be included in such counterparts by reference only. All of such counterparts together
shall constitute one and the same instrument. Complete copies ofthis Mortgage containing the entire
Exhibit A and Schedule I have been retained by Mortgagor and Agent.
Section 5.16. Successors and Assigns. The terms, provisions, covenants, representations,
indemnifications and conditions hereof shall be binding upon Mortgagor, and the successors and
assigns of Mortgagor, and shall inure to the benefit of Agent and Lenders and their respective
successors and assigns, and shall constitute covenants running with the Mortgaged Properties. Should
the agency under which Agent serves be terminated, or otherwise cease to exist, Lenders (including
the respective successors and assigns of each Person constituting a Lender) shall be deemed to be the
successors to Agent. All references in this Mortgage to Mortgagor, Agent or Lenders shall be deemed
to include all such successors and assigns.
Section 5.17. Place of Payment. All secured indebtedness which may be owing hereunder at
any time by Mortgagor shall be payable at the place designated in the Credit Agreement or other
governing instrument or, if no such designation is made, at the address of Agent indicated at the end
ofthis Mortgage or at such other place as Agent may designate in writing.
Section 5.18. Restatement of Prior Mortgages. Certain secured indebtedness is incurred in
renewal and extension of indebtedness described in and secured by the instruments set forth in Annex
I attached hereto and made a part hereof (as amended or supplemented to the date hereof, the "Prior
Mortgages"). It is the desire and intention ofthe parties hereto to renew and extend all liens, rights,
powers, privileges, superior titles, estates and security interests existing by virtue of the Prior
Mortgages and in connection therewith, it is understood and agreed that this Mortgage restates and
amends each of the Prior Mortgages in its entirety. This Mortgage renews and extends all liens,
rights, powers, privileges, superior titles, estates and security interests existing by virtue of each of the
Prior Mortgages, but the tenns, provisions and conditions of such liens, powers, privileges, superior
titles, estates and security interests shall hereafter be governed in all respects by this Mortgage and
any amendments or supplements thereto.
0056970000002 DALLAS 2454159.2
21
Mortgage
úOû721
Section 5.19. CHOICE OF LAW. THIS MORTGAGE SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF WYOMING AND THE LAWS OF THE UNITED STATES OF AMERICA,
EXCEPT TO THE EXTENT THE LAWS OF A STATE IN WHICH A PORTION OF THE
PROPERTY IS LOCATED (OR WHICH IS OTHERWISE APPLICABLE TO A PORTION
OF THE PROPERTY) NECESSARILY, OR IN THE SOLE DISCRETION OF AGENT
APPROPRIA TEL Y, GOVERNS WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE
MATTERS RELATING TO THE CREATION, RECORD NOTICE, ATTACHMENT,
PERFECTION OR ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS AND
OTHER RIGHTS AND REMEDIES OF AGENT GRANTED OR PROVIDED HEREIN.
Section 5.20. FINAL AGREEMENT OF THE PARTIES. THE WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[The remainder of this page is intentionally left blank.]
0056970000002 DALLAS 2454159.2
22
Mortgage
ÜOó722
IN WITNESS WHEREOF, this instrument is executed by Mortgagor on the date set forth in
the acknowledgment below, to be effective for all purposes as of the date first set forth above.
The address of Agent is:
1675 Broadway
Suite 1650
Denver, Colorado 80202
Attention: Guy C. Evangelista
The address of Mortgagor is:
1675 Broadway
Suite 2200
Denver, Colorado 80202
Attention: Kurtis Hooley
Signature Page
Mortgage
ÜOó723
ACKNOWLEDGEMENT
STATE OF COLORADO §
§
COUNTY OF DENVER §
The foregoing instrument was acknowledged before me by j( """'~ ~~ l4.0ô ~'f..--,
as ~Fo of Double Eagle Petroleum Co., a Maryland corpo,ratioIf, this
ó1¿ -c$.day of February, 2009.
~ r"-.~\\'e ý ~\\(\f\clL L
Printed Name
My commission expires:
~LS\2()YL
SEAL
Ackrtowledgttlent Page
Mortgage
ANNEX I
00&724
RECORDING SCHEDULE
1. Mortgage, Security Agreement and Assignment dated March 30, 1999 by and between
Double Eagle Petroleum and Mining Company and American Energy Finance (the
"March 1999 Mortgage").
Recording Jurisdiction
Fremont County, WY
Recording Data
Doc # 1199887
Recorded 4/16/99
Natrona County, WY
Doc # 632527
Recorded 4/9/99
Sweetwater County, WY
Doc # 1286105
Book 912, Page 280
Recorded 4/8/99
2. Mortgage, Security Agreement and Assignment dated August 12, 1999 by and
between Double Eagle Petroleum and Mining Company and American Energy Finance
relating to Tenn Loan
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc #750811
Book 1557, Page 320
Recorded 8/16/99
3. First Addendum to March 1999 Mortgage dated January 4,2000 (added new collateral)
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc # 757072
Book 1580, Page 556
Recorded 1/6/00
Crook County, WY
Doc # 543751
Book 372, Page 653
Recorded 1/6/00
Fremont County, WY
Doc # 1207692
Recorded 1/1 0/00
Lincoln County, WY
Doc # 863553
Book 440, Page 256
Recorded 1/6/00
OOô725
Natrona County, WY
Doc #647365
Recorded 1/6/00
Sweetwater County, WY
Doc #1305374
Book 922, Page 76
Recorded 2/1/00
4. Second Addendum to March 1999 Mortgage dated August 15, 2001 (added new
collateral)
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc # 783885
Book 1694, Page 90
Recorded 9/13/01
Carbon County, WY
Doc #0895653
Book 1007, Page 210
Recorded 9/13/01
Crook County, WY
Doc #552725
Book 386, Page 590
Recorded 9/12/01
Fremont County, WY
Doc #1223950
Recorded 9/21/01
Lincoln County, WY
Doc #875948
Book 472, Page 773
Recorded 9/13/01
N atrona County, WY
Doc #678048
Recorded 9/12/01
Sublette County, WY
Doc #286291
Bok 86, Page 253
Recorded 9/14/01
Doc #1343586
Book 942, Page 51
Recorded 9/13/01
Sweetwater County, WY
,t
000726
5. Third Addendum to March 1999 Mortgage dated October 10, 2002 (only increased line of
credit)
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc # 804911
Book 1803, Page 689
Recorded 10/18/02
Carbon County, WY
Doc #0900772
Book 1026, Page 158
Recorded 10/21/02
Crook County, WY
Doc #559002
Book 399, Page 337
Recorded 10/17/02
Fremont County, WY
Doc #2002-1235540
Recorded 11/4/02
Lincoln County, WY
Doc #804898
Book 502, Page 208
Recorded 10/18/02
Natrona County, WY
Doc #0702959
Recorded 10/24/02
Sublette County, WY
Doc #293485
Book 94, Page 415
Recorded 10/18/02
Sweetwater County, WY
Doc #1371689
Book 962, Page 44
Recorded 10/21/02
6. Fourth Addendum to March 1999 Mortgage dated January 27,2003 (only increased line
of credit)
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc # 810245
Book 1836, Page 561
Recorded 1/31/03
Carbon County, WY
Doc #0902142
Book 1031, Page 87
Recorded 2/6/03
00&727
Crook County, WY
Doc #560606
Book 403, Page 193
Recorded 1/31/03
Fremont County, WY
Doc #2003-1238153
Recorded 2/4/03
Lincoln County, WY
Doc #887299
Book 511, Page 224
Recorded 1/31/03
N atrona County, WY
Doc #0709493
Recorded 2/5/03
Sublette County, WY
Doc #295361
Book 123, Page 716
Recorded 2/7/03
Sweetwater County, WY
Doc #1378357
Book 967, page 1597
Recorded 1/31/03
7. Fifth Addendum to March 1999 Mortgage dated July 17, 2003 (only increased line of
credit)
Recording Jurisdiction
Campbell County, WY
Recording Data
Doc # 824982
Book 1922, Page 1
Recorded 10/29/03
Carbon County, WY
Doc #0906041
Book 1048, Page 93
Recorded 10/30/03
Crook County, WY
Doc #565052
Book 412, Page 408
Recorded 10/31/03
Fremont County, WY
Doc #2003-1247407
Recorded 11/4/03
(;'Oó728
Lincoln County, WY
Doc #0894918
Book 540, Page 537
Recorded 10/30/03
N atrona County, WY
Doc #749634
Recorded 8/27/04
Sublette County, WY
Doc #300836
Book 107, Page 212
Recorded 11/12/03
Sweetwater County, WY
Doc #1399433
Book 987, Page 1446
Recorded 10/30/03
8. Sixth Addendum to March 1999 Mortgage dated August 1,2006 (added new collateral)
Recording jurisdiction
Campbell County, WY
Recording Data
Doc # 875673
Book 2179, Page 129
Recorded 8/1 0/06
Carbon County, WY
Doc #0921138
Book 1109, Page 227
Recorded 8/9/06
Crook County, WY
Doc #582540
Book 447, Page 112
Recorded 8/7/06
Fremont County, WY
Doc #2006-1280586
Recorded 8/8/06
Lincoln County, WY
Doc #920968
Book 629, Page 81
Recorded 8/4/06
N atrona County, WY
Doc #798387
Recorded 8/9/06
Sublette County, WY
Doc #320889
Book 133, Page 360
Recorded 8/4/06
(;00729
Sweetwater County, WY
Doc #1478935
Book 1865, Page 1740
Recorded 8/4/06
SCHEDULE I
NET REVENUE INTERESTS
WORKING INTERESTS
(;;Ov730
Schedule I
WI NRI
Catalina Unit Field, Carbon County OOv731
cu 1X-12 MV 73.840 60.674
CU 11-7 73.840 60.674
CU 11-18 73.840 60.674
CU 12-12 73.840 60.674
CU 13-6 73.840 60.674
CU 13-7 73.840 60.674
CU 13-32 73.840 60.674
CU 14-7 73.840 60.674
CU 20-1 73.840 60.674
CU 21-12 73.840 60.674
CU 22-1 73.840 60.674
CU 22-6 73.840 60.674
CU 22-7 73.840 60.674
CU 22-13 73.840 60.674
CU 22-18 73.840 60.674
CU 24-6 73.840 60.674
CU 24-7 73.840 60.674
CU 24-32 73.840 60.674
CU 31-1 73.840 60.674
CU 31-6 73.840 60.674
CU31-13 73.840 60.674
CU 31-18 73.840 60.674
CU 32-12 73.840 60.674
CU 33-1 73.840 60.674
CU 33-6 73.840 60.674
CU 33-7 73.840 60.674
CU 33-31 73.840 60.674
CU 36-12 73.840 60.674
CU 40-1 73.840 60.674
CU 40-6 73.840 60.674
CU 42-1 73.840 60.674
CU 42-12 73.840 60.674
CU 42-18 73.840 60.674
CU 43-12 73.840 60.674
CU 44-1 73.840 60.674
CU 44-7 73.840 60.674
CU 44-12 73.840 60.674
CU 44-31 73.840 60.674
Copperhead Field, Converse County
COPPERHEAD 1-7 0.000 0.430
Cow Creek Field, Carbon County
CCU 1-12 DK 100.000 79.597
005697 000002 Dallas 2458047.1 -- Page 1 of 8
Schedule I ûO&732
WI NRI
CCU 1-12 FRN 100.000 80.022
CCU 1X-12 DK 100.000 79.660
DEEP 2 86.000 68.460
MAD 1 86.000 68.460
Doty Mtn Field, Carbon County
1-14 20.552 17.980
1-22 20.552 17.980
1-23 20.552 17.980
3-14 20.552 17.980
3-22 20.552 17.980
3-23 20.552 17.980
3-27 20.552 17.980
5-11 20.552 1 7. 980
5-14 20.552 17 .980
5-22 20.552 17.980
5-23 20.552 17 .980
7-21 20.552 17.980
7-22 20.552 17.980
7-27 20.552 17.980
9-15 20.552 . 17.980
9-21 20.552 17.980
9-22 20.552 17.980
9-23 20.552 17.980
11-11 20.552 17 .980
11-14 20.552 17.980
11-15 20.552 17.980
11-22 20.552 17.980
1 3-14 20.552 17.980
13-21 20.552 17.980
13-22 20.552 17.980
13-23 20.552 17.980
1 5-14 20.552 17.980
15-15 20.552 17.980
15-22 20.552 17.980
CONTRACT D1 MINUS 20.552 17.980
CONTRACT D1 PLUS 20.552 17.980
Four Mile Gulch Field, Sweetwater County
4 MILE GULCH 10-9 2.386 1.909
4 MILE GULCH 10-32 2.576 3.738
4 MILE GULCH 13-32 6.724 5.612
4 MILE GULCH 20-6 2.981 2.385
4 MILE GULCH 20-32 5.000 4.000
4 MILE GULCH 30-5 6.861 5.489
4 MILE GULCH 30-32 6.835 5.704
005697 000002 Dallas 2458047.1 -- Page 2 of 8
Schedule I
úOú733
WI NRI
4 MILE GULCH 40-32 15.678 12.778
4 MILE GULCH 42-5 3.085 2.458
4 MILE GULCH 50-32 10.778 8.622
James Creek Field, Sweetwater County
BRITZ FED 1-31 25.000 20.063
FEDERAL 1-6 25.000 20.063
Lodgepole Field, Sweetwater County
LODGEPOLE 20-29 0.992 0.794
LODGEPOLE 22-29 0.992 0.785
LODGEPOLE 24-29 0.992 0.794
LODGEPOLE 30-28 1.763 1.329
Long Butte Field, Fremont County
FLATT LB UNIT 1-28 1.340 1.132
LONG BUTTE 1 2.472 2.089
LONG BUTTE 1-5 0.250 0.197
LONG BUTTE 3 1.340 1.132
LONG BUTTE 4 1.340 1.132
LONG BUTTE 5 1.340 1.132
LONG BUTTE 6-2 1.340 1.132
LONG BUTTE 7 1.340 1.113
LONG BUTTE 10 2.472 2.089
LONG BUTTE 25-1 9.072 7.320
LONG BUTTE 30-1X 1.132 0.894
LONG BUTTE 31-2 1.340 1.132
LONG BUTTE 31-3 2.472 2.089
Madden Field, Fremont County
ALLEN DEEP 1 44.383 37.090
LLOYD 1-26 50.639 41 .735
MADDEN 2-1W 2.000 1.620
Madden Deep Field, Fremont County
BIG HORN 1-5 0.349 0.290
BIG HORN 2-3 0.349 0.290
BIG HORN 4-36 0.349 0.290
BIG HORN 5-6 0.349 0.290
BIG HORN 7-34 0.349 0.290
005697000002 Dallas 2458047.1 -- Page 3 of 8
Schedule I
OOû734
WI NRI
BIG HORN 8-35 0.349 0.290
BIG HORN 9-4 0.349 0.290
BIG HORN 10-5 0.349 0.290
Marianne Field, Sweetwater County
ANDERSON FED 12-1 5.417 4.469
FEDERAL 18-1 10.716 9.055
MADEX 13-1 21.208 17.690
MADEX 24-2 1 0.450 8.838
STEVE FED 14-1 17.500 13.687
UPRC 13-3 9.531 7.545
Mesa Unit PA-A Field, Sublette County
MESA 1-7 0.000 0.313
MESA 1-7D 0.000 0.313
MESA 1A-7D 0.000 0.313
MESA 2-7D 0.000 0.313
MESA 2A-7D 0.000 0.313
MESA 3-7 0.000 0.313
MESA 4-8 0.000 0.313
MESA 4D1-8 0.000 0.313
MESA 5-8 0.000 0.313
MESA 581-8 0.000 0.313
MESA 6-7D 0.000 0.313
MESA 7-7 0.000 0.313
MESA 8-7D 0.000 0.313
MESA 9-7 0.000 0.313
MESA 98-7D 0.000 0.313
MESA 10-7D 0.000 0.313
MESA 12-8 0.000 0.313
MESA 13-5 0.000 0.313
MESA 14-6D 0.000 0.313
MESA 15-6 0.000 0.313
MESA 16-6D 0.000 0.313
Mesa Unit PA-B Field, Sublette County
MESA 2 6.250 5.289
MESA 2-16D 8.000 6.681
MESA 3 8.000 6.681
MESA 3-16D 8.000 6.681
MESA 4-16D 8.000 6.681
MESA 4D-16D 8.375 6.981
MESA 5A-16D 8.289 6.912
MESA 581-16 8.000 6.780
005697 000002 Dallas 2458047.1 -- Page 4 of 8
Schedule I
WI NRI ûOv~735
MESA 582-16 8.000 6.780
MESA 5C2-16 8.401 7.020
MESA 5D2-16 8.573 7.139
MESA 6 8.000 6.681
MESA 6-16 9.825 8.135
MESA 6A-16D 8.419 7.015
MESA 683-16 8.234 6.868
MESA 6D3-16 8.193 6.836
MESA 7-16D 8.000 6.681
MESA 7C-16D 8.385 6.989
MESA 7D1-16 8.921 7.450
MESA 8-17 8.000 6.681
MESA 8A1-17 8.000 6.780
MESA 8D1-17 8.000 6.681
MESA 8D2-17 8.000 6.681
MESA 9-16 8.000 6.681
MESA 9-17D 8.000 6.681
MESA 10-16 8.000 6.681
MESA 10A-16 8.588 7.150
MESA 11-16 8.000 6.681
MESA 11A-16D 8.231 6.866
MESA11D1-16 8.000 6.681
MESA 12-16 8.000 6.681
MESA 12A-16 8.672 7.217
MESA 128-16D 8.664 7.217
MESA 13-9D 8.000 6.681
MESA 13A-16D 8.534 7.107
MESA 13AA-16D 8.725 7.259
MESA 14-16 8.000 6.681
MESA 14A-16D 8.417 7.014
MESA 14B-16D 8.706 7.245
MESA 14C2-16 8.000 6.681
MESA 14D1-16 8.000 6.681
MESA 15-16 8.000 6.681
Mesa Unit PA-C Field, Sublette County
STEWRT PT 1-20D 6.400 5.253
STEWRT PT 1 C3-20 6.400 5.253
STEWRT PT 2-20 6.400 5.253
STEWRT PT 3-20D 6.400 5.253
STEW RT PT 4-29D 6.400 5.253
STEWRT PT 4A3-20D 6.400 5.253
STEW RT PT 483-20D 6.400 5.253
STEWRT PT 4C3-20D 6.400 5.253
STEWRT PT 5-20V 6.400 5.253
STEWRT PT 7-20 6.400 5.253
STEWRT PT 8-20 6.400 5.253
STEWRT PT 8B3-20 6.400 5.253
005697 000002 Dallas 2458047.1 -- Page 5 of 8
Schedule I
WI NRI ÜOú736
STEWRT PT 8B4-20 6.400 5.253
STEWRT PT 14-20 6.400 5.253
STEWRT PT 15-20D 6.400 5.253
Rock Island Field, Sweetwater County
UPR ROCK ISL UN 4H 0.000 1.250
Seven Mile Wash Field, Lincoln County
1 0-18A 17.214 14.380
HAILSTONE 1-08E 0.211 0.181
HAILSTONE 3-08E 0.564 0.483
HAILSTONE 358-08E 0.210 0.171
HAILSTONE 5-08E 0.211 0.181
HAILSTONE 6-08E 0.210 0.171
SVN M WASH 100-18E 16.277 13.939
Sun Dog Field, Carbon County
SUN DOG 2-8 3.903 3.258
SUN DOG 2-9 3.903 3.258
SUN DOG 2-17 3.903 3.258
SUN DOG 2-19 3.903 3.258
SUN DOG 2-21 3.903 3.258
SUN DOG 4-8 3.903 3.258
SUN DOG 4-9 3.903 3.258
SUN DOG 4-15 3.903 3.258
SUN DOG 4-16 3.903 3.258
SUN DOG 4-17 3.903 3.258
SUN DOG 4-20 3.903 3.258
SUN DOG 6-8 3.903 3.258
SUN DOG 6-9 3.903 3.258
SUN DOG 6-17 3.903 3.258
SUN DOG 6-19 3.903 3.258
SUN DOG 6-20 3.903 3.258
SUN DOG 8-8 3.903 3.258
SUN DOG 8-17 3.903 3.258
SUN DOG 8-19 3.903 3.258
SUN DOG 8-21 3.903 3.258
SUN DOG 10-4 3.903 3.258
SUN DOG 10-5 3.903 3.258
SUN DOG 10-8 3.903 3.258
SUN DOG 10-9 3.903 3.258
SUN DOG 10-16 3.903 3.258
SUN DOG 10-17 3.903 3.258
SUN DOG 10-18 3.903 3.258
005697000002 Dallas 2458047.1 -- Page 6 of 8
Schedule I
WI NRI
SUN DQG 10-19 3.903 3.258 COiY737
SUN DOG 10-20 3.903 3.258
SUN DOG 12-4 3.903 3.258
SUN DOG 12-8 3.903 3.258
SUN DOG 12-9 3.903 3.258
SUN DOG 12-16 3.903 3.258
SUN DOG 12-17 3.903 3.258
SUN DOG 12-18 3.903 3.258
SUN DOG 12-19 3.903 3.258
SUN DOG 14-4 3.903 3.258
SUN DOG 14-8 3.903 3.258
SUN DOG 14-16 3.903 3.258
SUN DOG 14-17 3.903 3.258
SUN DOG 14-18 3.903 3.258
SUN DOG 14-20 3.903 3.258
SUN DOG 14-21 3.903 3.258
SUN DOG 16-8 3.903 3.258
SUN DOG 16-16 3.903 3.258
SUN DOG 16-17 3.903 3.258
SUN DOG 16-18 3.903 3.258
SUN DOG 16-19 3.903· 3.258
Swan Field, Sweetwater County
HORSESHOE 10-5 0.195 0.153
HORSESHOE 10-33 0.467 0.359
HORSESHOE 10-34 1.334 1.049
HORSESHOE 13-33 0.482 0.384
HORSESHOE 33-33 0.467 0.359
HORSESHOE 40-5 0.426 0.341
HORSESHOE 40-33 0.325 0.250
HORSESHOE 40-34 0.426 0.341
HORSESHOE 42-33 0.325 0.250
SILVER FED 30-2 1.820 1.541
Swan South Field, Sweetwater County
HAVEN UNIT 10-11 0.683 0.558
HAVEN UNIT 30-11 0.185 0.151
SWAN SOUTH 10-1 3.086 2.400
SWAN SOUTH 10-2 0.208 0.157
SWAN SOUTH 20-1 1.131 0.848
SW AN SOUTH 20-2 0.836 0.678
SWAN SOUTH 30-1 1.872 1.471
SW AN SOUTH 30-2 1.820 1.541
SWAN SOUTH 40-1 3.922 3.353
SWAN SOUTH 50-1 2.558 2.116
SWAN SOUTH 50-2 3.891 3.274
005697 000002 Dallas 2458047.1 -- Page 7 of 8
Schedule I
WI NRI C"OÚ738
SW AN SOUTH 70-2 2.225 1.731
SWAN SOUTH 80-1 1 .408 1.095
SW AN SOUTH 80-2 1.150 0.937
SWAN SOUTH 80-31 1 .420 1.157
SWAN SOUTH 85-1 1.627 1.300
SWAN SOUTH 95-1 0.877 0.682
Waltman Field, Natrona County
WALTMAN 21-19 19.685 16.014
Whiskey Buttes Field, Lincoln/Sweetwater County
WHISKEY BUTTES 0.564 0.483
Windmill Field, Campbell County
RABOURN 11-5 100.000 80.250
Wolf Draw Field, Crook County
WOLF DRAW UNIT 3.857 2.980
005697 000002 Dallas 2458047.1 -- Page 8 of 8
EXHIBIT A
DESCRIPTION OF MORTGAGED PROPERTIES
úOú739
CATALINA UNIT
COPPERHEAD
COW CREEK UNIT
005697000002 DALLAS 2457674.1
EXHIBIT A
û00740
Township 16 North. Range 91 West
Section 6: All
Section 7: All
Section 18: All
Township 16 North. Range 92 West
Section 1: All
Section 12: All
Section 13: All
Township 17 North. Ran~e 91 West
Section 27: All
Section 31 : All
Section 32: All
Section 33: All
Section 34: All
Carbon County, Wyoming
Township 40 North. Range 76 West
Section 8: All
Converse County, Wyoming
TownshiD 16 North. Range 91 West. 6th P,M.
Section 6: Lot 27, SE~SW~
Section 7: Lot 5, 6, 7, 8, E~NW~, NE~SW~
Section 18: Lot 5
Township 16 North. Range 92 West. 6th P.M.
Section 1: SE~SE~
Section 11: EY2SE~
Section 12: SY2, NE~, E~NW~, SW~NW~
Section 13: NY2, N~SW~, SE~SW~, NW~SE~
Section 14: NE~NE~
Carbon County, Wyoming
DOTY MOUNTAIN (CBM) UNIT (;'0,/741
TownshiD 17 North. Range 91 West. 6th P.M.
Section 11: S12S12
Section 12: SWY-íSWY-í
Section 13: W12 Wih.
Section 14: All
Section 15: E12E12, S12SWY-í, SWY-íSE12
Section 21: E12E12
Section 23: All
Section 24: Lots 4, 5, 12, 13 (aka W/2W/2)
Section 26: N12N12
Section 27: Nih.Nih.
Section 28: NEY-íNEY-í
Carbon County, Wyoming
FOUR MILE GULCH
Township 24 North. Range 110 West
Section 32: All
Section 33: All
Sweetwater County, Wyoming
JAMES CREEK
Credo Federal #1-6
Township 14 North. Range 103 West. 6th P.M.
Section 6: NE~
Britz Federal #1
Township 15 North. Range 103 West. 6th P.M.
Section 31: SE Y-í
Sweetwater County, Wyoming
LODGEPOLE
Township 24 North. Range 11 0 West
Section 28: All
Section 29: All
Sweetwater County, Wyoming
LONG BUTTE
TownshiD 38 North. Range 91 West. 6th P.M.
Section 1: All
Section 2: All
Section 3: All
005697 000002 DALLAS 2457674.1
2
MADDEN UNIT
MARIANNE FIELD
005697000002 DALLAS 2457674.1
Section 4:
Section 5:
Section 6:
Section 7:
Section 8:
Section 9:
Section 10:
Section 11:
NI 00~742
All
All
Lots 1,2,5,6, NE4, E2NW4, NE4SE4
N2, N2S2
N2NW4, SW4NW4, NW4SW4
NE4~4,N2NE4,SE4NE4
N2, NE4SW4, N2SE4, SE4SE4
Township 38 North. Range 92 West. 6th P.M.
Section 1: Lots 1-11, SW4NE4, SE4~4, NW4SE4
Section 30: All
Section 31: All
Township, 39 North. Range 91 West. 6th P.M.
Section 28: All
Section 29: All
Section 30: Lots 3-8, E2, E2SW4, SE4NW4
Section 31 All
Section 32: All
Section 33: All
Township 39 North. Range 92 West. 6th P.M.
Section 25: S2SE4, NE4SE4, SE4SW4
Section 35: E2SE4, SE4NE4
Section 36: All
Fremont County, Wyoming
Township 39 North. Range 90 West. 6th P.M.
Section 23: SE~NE~,EY2SW~, SE~
Section 24: SW~NW~, ~~SW~
Section 26: ~Y<íNE~, EY2NW~
Fremont County, Wyoming
Anderson 12-1
Township 20 North. Range 103 West. 6th P.M.
Section 12: SE ~
Madex 13-1
Township 20 North. Range 103 West. 6th P.M.
Section 13: SW~
3
MESA UNIT
ROCK ISLAND UNIT
005697000002 DALLAS 2457674.1
00û743
Madex 18-1
Township 20 North. Range 102 West. 6th P.M.
Section 18: SW~
Madex 24-2
Township 20 North. Range 103 West. 6th P.M.
Section. 24: NW~
Steve Federa114-1
Township 20 North. Range 103 West. 6th P.M.
Section 14: SE~
Sweetwater County, Wyoming
Township 32 North. Range 109 West. 6th P.M.
Section 5: SW~SW~
Section 6: SYíSE~, SE~SW~
Section 7: NE~, EYíNW~, N~SE~
Section 8: W~NW~, NW~SW1/4
Section 9: SYíSW~, SW~SE~
Section 16: W~, NE~, N~SE~, SW~SE~
Section 17 SE~NE~, NE~SE~
Township 33 North. Range 109 West. 6th P.M.
Section 19: E~E~SE~, E~SE~NE~, SE~NE~NE~
Section 20: SYíNW~, SYíN~NW~, SW~NE~,
SYíNW~NE~, SW~NE~NE~,
W~SE~NE~, SW~, W~SE~, W~E~SE~
Section 29: N~N~NW~, N~NW~NE~,
NW~NE~NE~
Section 30: NE~NE~NE~
Sublette County, Wyoming
#4-H
Township 19 North. Range 97 West. 6th P.M.
Section 4
Sweetwater County, Wyoming
4.
SEVEN MILE WASH
SUN DOG
SWAN
SWAN SOUTH
005697 000002 DALLAS 2457674.1
Township 21 North. Range 112 West
Section 18: All
00ú744
Lincoln County, Wyoming
Township 16 North. Range 91 West
Section 3: All
Section 4: All
Section 5: All
Section 8: All
Section 9: All
Section 10: All
Section 16: All
Section 17: All
Section 18: All
Section 19: All
Section 20: All
Section 21: All
Section 29: All
Township 17 North Range 91 West
Section 34: All
Section 35: All
Carbon County, Wyoming
Township 23-24 North. Range 110 West
Section 1: All
Section 2: All
Section 3: All
Section 4: All
Section 5: All
Section 9: All
Section 10: All
Section 11: All
Sweetwater County, Wyoming
Township 23-24 North. Range 110 West
Section I: All
Section 2: All
Section 3: All
5
WALTMAN 21-19
WHISKEY BUTIES UNIT
WINDMILL (MUDDY)
WOLF DRAW UNIT
005697000002 DALLAS 2457674.1
Section 4: All
Section 5: All
Section 9: All
Section 10: All
Section 11: All
00û745
Sweetwater County, Wyoming
TownshiD 36 North. Range 87 West. 6th P.M.
Section 24: SE4SE4
Section 25: NE4NE4
And any rights accruing from the drill-site spaced unit for the
Waltman 21-19 Well.
Natrona County, Wyoming
TownshiD 21 North. Range 111 West. 6th P.M.
Section 6: S~SW~
TownshiD 21 North. Range 112 West. 6th P.M.
Section 18: E~SWY-í, SEY-íNE~
Lincoln County, Wyoming
Raybourn #11-5
TownshiD 50 North. Ran2e 69 West. 6th P.M.
Section 5: NW~NW~
Campbell CO\U1ty, Wyoming
TownshiD 52 North. Range 68 West. 6th P.M.
Section 18: Lots 3, 4, EY2SWY-í, SE~
Section 19: Lot 1
Township 52 North. Ran2e 69 West. 6th P.M..
Section 13:. Lot 16
Section 24: Lot 1
Crook County, Wyoming
6
ÜOv746
1. The interest in the Catalina Unit described on Page 1 of this Exhibit A shall include any and
all rights accruing pursuant to ownership in the Catalina Unit.
2. The interest in the Copperhead Unit described on Page 1 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Copperhead Unit.
3. The interest in the Cow Creek Unit described on Page 1 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Cow Creek Unit.
4. The interest in the Doty MOl.U1tain (CBM) Unit described on Pages 1 and 2 of this Exhibit A
shall include any and all rights accruing pursuant to ownership in the Doty MOW1tain (CBM)
Unit.
5. The interest in the Four Mile Gulch Unit described on Page 2 of this Exhibit A shall
include any and all rights accruing pursuant to ownership in the Four Mile Gulch Unit.
6. The interest in the James Creek Unit described on Page 2 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the James Creek Unit.
7. The interest in the Lodgepole Unit described on Page 2 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Lodgepole Unit.
8. The interest in the Long Butte Unit described on Pages 2 and 3 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the Long Butte Unit.
9. The interest in the Madden Unit described on Page 3 of this Exhibit A shall include any and
all rights accruing pursuant to ownership in the Madden Unit.
10. The interest in the Marianne Field Unit described on Page 3 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the Marianne Field Unit.
11. The interest in the Mesa Unit described on Pages 3 and 4 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Mesa Unit.
12. The interest in the Rock Island Unit described on Page 4 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Rock Island Unit.
13. The interest in the Seven Mile Wash Unit described on Page 4 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the Seven Mile Wash Unit.
14. The interest in the Soo Dog Unit described on Page 4 of this Exhibit A shall include any and
all rights accruing pursuant to ownership in the Sun Dog Unit.
15. The interest in the Swan Unit described on Page 5 of this Exhibit A shall include any and all
rights accruing pursuant to ownership in the Swan Unit.
005697000002 DALLAS 2457674.1
7
úOv747
16. The interest in the Swan South Unit described on Page 5 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Swan South Unit.
17. The interest in the Waltman 21-19 Unit described on Page 5 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the Waltman 21-19 Unit.
18. The interest in the Whiskey Butte Unit described on Page 5 of this Exhibit A shall include
any and all rights accruing pursuant to ownership in the Whiskey Butte Unit.
19. The interest in the Windmill (Muddy) Unit described on Page 5 of this Exhibit A shall
include any and all rights accruing pursuant to ownership in the Windmill (Muddy) Unit.
20. The interest in the Wolf Draw Unit described on Page 6 of this Exhibit A shall include any
and all rights accruing pursuant to ownership in the Wolf Draw Unit.
The interests included in the wells and fields described on this Exhibit A in the Waltman 21-19,
James Creek and Marianne leases shall include any and all rights accruing pursuant to ownership
in these leases.
This Exhibit A has been provided by Double Eagle Petroleum Co., fonnerly known as Double
Eagle Petroleum and Mining Company with the intent of providing collateral for the attached
mortgage. Bank of Oklahoma, N.A. has relied on the accuracy and completeness of the legal
descriptions provided above.
If the entire interest owned by Double Eagle Petroleum Co., fonnerly known as Double Eagle
Petroleum and Mining Company in any of the wells, fields and units included in this Exhibit A is
found to be in error, it is the intent of the parties hereto to include all interests owned by Double
Eagle Petroleum Co., fonnerly known as Double Eagle Petroleum and Mining Company as a part
of the collateral.
005697 000002 DALLAS 2457674.1
8