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HomeMy WebLinkAbout964104BOOK 1 448 PAGE 09 MORTGAGE, SECURITY AGREEMENT FINANCING STATEMENT, AND ASSIGNMENT THIS AGREEMENT made and entered into this 22 day of September, 2011, by and between WESTERN AMERICAN RESOURCES, LLC (hereinafter referred to collectively as "Borrowers of 555 17 Street, Suite 1400, Denver, Colorado 80202, and FIRST INTERSTATE BANK, of 300 SW Wyoming Boulevard, Mills, Wyoming 82644 (hereinafter referred to as "Bank In consideration of a revolving line of credit for Twelve Months (12) in the amount of One Million Nine Hundred Forty Two Thousand Dollars ($1,942,000.00) made to Borrower by Bank, together with interest thereon, as described in the Promissory Note of even date, the parties hereto agree: 1. Mortgage, Security Agreement Borrower hereby mortgages, conveys, assigns, warrants and grants a security interest to the Bank in all of the right, title and interest of the Borrower, including but not limited to, working interests, royalty interests, overriding royalty interests, fee mineral interests, partnership interests and limited partnership interests and any other oil and gas leasehold interests property and minerals located in Converse, Lincoln, Niobrara and Sweetwater County, Wyoming, as more fully described in Exhibit "A" attached hereto, whether now owned or hereafter acquired and any proceeds therefrom, together with all of the Borrower's interest in the following: (a) Any presently existing unitization, pooling, or operating agreements and the units created thereby or operated thereunder, which are specifically described in Exhibit "A" or which relate to any of the leasehold interests described therein; 1 11 1 111 11111111111111111111111111111 11 111 IIII 1 111 997753 Book 1448 Page 96 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 1 00690 RECEIVED 4/16/2012 at 10:46 AM RECEIVING 964104 BOOK: 784 PAGE: 696 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY ox 1448 0 97 (b) The oil, gas, and other hydrocarbons which are in, under, upon produced or that may be produced from leasehold interests described in Exhibit "A (c) Any production sale contracts, options, or other agreement affecting the sale of production from the leasehold interests described in Exhibit "A (d) All of the machinery, equipment, materials, improvements, hereditament, appurtenances, and other property, real, personal and /or mixed, now or hereafter a part of or located upon the premises described in Exhibit "A" or used or obtained in connection herewith; all of which said interests, rights and leases, together with any additions thereto which may be subject to the lien hereby created (herein referred to as the "Collateral are pledged to secure payment of all of the indebtedness now existing or hereinafter incurred from the Borrower to the Bank and the performance of the borrower's obligation hereunder. 2. Assignment of Production (a) As further security for the payment of the indebtedness, upon written demand by the Bank, the Borrower shall assign to the Bank, effective as of the date of delivery of written demand at 7:00 a.m., all oil, gas and other hydrocarbons which are thereafter produced or stored and which accrue to the leasehold interests, partner interests, or limited partnership interests described in Exhibit "A" attached hereto. (b) All parties producing, purchasing, or receiving any such production or hydrocarbons or the proceeds therefrom, including leases of any mineral acres mortgaged hereunder, are authorized and directed by the Borrower to deliver or pay all such hydrocarbons, the proceeds therefrom, production and royalty payments to the Bank, as assignee and secured party of the Borrower. Such parties shall be fully protected and held harmless by the Borrower and shall be under no obligation to see the application by 111 i 1111111 2 997753 Book 1448 Page 97 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder BOOK 4 4 8 PAH 09 the Bank of any proceeds or payments received by it. Borrower agrees to execute and deliver such transfer orders, or other documents, as may be necessary or proper to effectuate the intent of this Agreement. (c) All amounts received by the Bank as a result of the assignment of oil and gas production made pursuant to this Agreement shall be applied immediately upon receipt to the Borrower's indebtedness to satisfy the principal and interest payments, accrued to the date of such receipt or which will become due within a thirty (30) day period. Any receipts over and above that required to pay the interest and minimum monthly principal obligations shall be deposited to Borrower's demand account with the Bank. In the event the production payments received by the Bank are insufficient to satisfy the monthly payment requirements, any deficiency shall be immediately due and payable. 3. Borrower's Warranties and Covenants Borrower hereby presents warrants and agrees that: (a) Borrower will pay the indebtedness secured by this Mortgage, Security Agreement and Assignment of Production and any and all obligations of liabilities to the Bank in accordance with their terms. (b) Borrower is now, or will be at that time Borrower acquires possession thereof, the owner of the Collateral free from any liens, encumbrances or security interests except for the security interest granted hereby and assessments and restrictions of record and Borrower shall defend the Collateral against all claims and demands of every kind and nature. 1 IIIIIII III II 1 III 1111111111 El 11111 1111 1 1 1111 1111 997753 Book 1448 Page 98 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 3 00698 interests in full force and effect. 4 BOOK 4 4 8 PACE 09 9 (c) Borrower will keep the Collateral free from liens, encumbrances and other security interests. (d) Borrower will not sell or otherwise assign the Collateral or any interest therein without prior written consent of the Bank. (e) At its option, the Bank may discharge taxes, liens or security interests or other encumbrances at any time levied or placed on the Collateral, and the Borrower agrees to reimburse the Bank on demand for any payment made or any expense incurred by the Bank pursuant to this authorization. (f) No mortgage of financing statement covering the Collateral or any part thereof or any proceeds thereof is on file in any public office, and at the request of the Bank, the Borrower will join with the Bank in executing one or more financing statements in form satisfactory to the Bank and will pay the cost of filing the same in all public offices wherever filing is deemed by the Bank to be necessary or desirable. (g) Borrower has good and marketable title to all the mortgaged property, pledged and assigned to the Bank as security and that said property interests are free and clear of all other liens or encumbrances except those being discharged at the time of closing. (h) Borrower will comply with all of the terms and conditions, expressed or implied, of any and all leases and leasehold interests upon which the interest which are the subject hereof are or may be dependent, and with the terms and conditions of all assignments of said leases constituting Borrower's chain of title thereto, and do all things necessary to prevent forfeiture of said leasehold interests and to keep said leasehold 111111111 111 11111 11111 11111 1111 1 1111 11 1 111 11111111 997753 Book 1448 Page 99 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 900K 1 4 8 PAGE. 10 0 (i) Borrower will pay all operating expenses relating to the production of oil, gas, and other minerals from the mortgaged properties and shall discharge or defend to the satisfaction of the Bank any lien record against these properties within a period of thirty (30) days from the recording of such lien and Borrower shall notify Bank of any such lien filing within ten (10) days from recording. (j) Borrower will protect the properties described herein, real, personal and /or mixed against all claims of mechanics or materialmen which might rise from Borrower's operations or operations on behalf of the Borrower, will promptly pay all charges for labor and material incurred in such operations, and will indemnify and hold the Bank free and clear of any liens or attempted liens upon said properties and Borrower shall notify Bank of any such lien filing within ten (10) days from recording. (k) Borrower will continuously preserve, maintain and repair the mortgaged property such that the mortgage security is not impaired, will not waste the mortgaged property, and will cause to be operated in good workmanlike manner (free of all costs and expenses to the Bank) every well, station, plant, and other operating unit now or thereafter located on any of the property described in Exhibit "A will procure and keep in force in a company or companies acceptable to the Bank all such public liability insurance as may from time to time be required by the Bank with respect to the mortgaged properties or any part thereof; and will faithfully comply or cause to be complied with all laws (federal, state, or municipal) and all orders, rules and regulations of every governmental agency in any way applicable to the Borrower, the mortgaged properties or the operation, development or maintenance thereof, including the production or sale of oil, gas, or other minerals therefrom. 11111111111111111 1111 l 111111111111111111 997753 Book 1448 Page 100 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 5 Note. indebtedness. 4. Further Assurances C.p V 0 V .j.. BOOK 1 4 4 8 PAGE 101 The Borrower will execute and deliver to the Bank such other and further instruments and will due such other and further acts as in the opinion of the Bank may be necessary to carry out more effectively the purposes and intent of the parties. 5. Taxes The Borrower will promptly pay all taxes, assessments and other governmental charges legally imposed on the Collateral, the proceeds therefrom or the Bank's interest therein. 6. Events of Default The occurrence of any of the following shall constitute a default under this Mortgage and Security Agreement: (a) Borrower's failure to observe and perform any of the terms and conditions of this Agreement or the Note. (b) The occurrence of any event of default specified in this Agreement or (c) The occurrence of any event which results in the acceleration of the maturity of the indebtedness of the Borrower. (d) Any representation or warranty made by the Borrower which proves to be untrue in any material respect. (e) The mortgage lien and security interest granted hereunder are subordinate or inferior in priority to the lien or claim of any other person or entity. (f) The Borrower becomes insolvent or the Bank deems itself insecure, or feels that the Borrower is not capable of meeting the debt service requirements of the 1 997753 Book 1448 Page 101 Recorded 3/20/2012 At 1:45 PM 6 Lucile K. Taylor, Converse County Clerk Recorder NM 1 4.4 PAGE 102 (g) Borrower becomes the subject of bankruptcy or reorganization proceedings under the provisions of any bankruptcy or insolvency law, a receiver or trustee is appointed, or Borrower makes an assignment for the benefit of creditors. (h) Failure of the Borrower, waiting thirty (30) calendar days after notice from the Bank, to cure a default in the due performance or observance of any covenant of agreement excluding a default in the payment of principal or interest. (i) Borrower's failure to pay principal or interest when due. 7. Bank's Rights Upon Default (a) In the event of a default as provided herein, the entire indebtedness secured by this Agreement shall become due and payable immediately at the Bank's option and Bank shall have the rights and remedies provided by law and/or any agreements between the Borrower and Bank, including the right to take possession of the Collateral, with or without demand and with or without process of law and to sell the Collateral, at one or more commercial reasonable sales, as an entirety or in parts, as the Bank may elect. (b) The parties hereto agreed that any requirements of reasonable notice shall be met if the Bank sends such notice to the Borrower at least five (5) days prior to the date of sale, disposition or other event giving rise to required notice. It is further hereby agreed that public sale of the Collateral by auction conducted after advertisement of the time and place thereof in a newspaper circulated in the county in which the sale is to be held shall be deemed to be commercially reasonable disposition of the Collateral. The Borrower shall be liable for any deficiency remaining after such disposition or the amount required to redeem the Collateral shall include reasonable attorneys' fees and 111 997753 Book 1448 Page 102 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 7 007 ©2 3OOK 8 PAGE 10 costs and expenses incurred in connection with the acquisition of possession and disposition thereof. (c) The proceeds of any sale of the Collateral or any part thereof shall be applied as follows: (i) To the payment of all expenses incurred by the Bank in the performance of its duties, including but not limited to, expenses of taking possession, of any sale, of advertisement thereof, of conveying, court costs, and compensation of agents, employees and legal fees. (ii) To the payment of interest to the date of such payment on any indebtedness of the Borrower to the Bank; (iii) To the payment of principal on any indebtedness of the Borrower to the Bank; (iv) Any surplus thereafter remaining shall be paid to the Borrower or Borrower's successors or assigns as their interest may appear. 8. Incorporation by References All of the terms, provisions and conditions contained in the Note are hereby incorporated by reference as if fully set forth herein. 9. Indebtedness Secured The indebtedness secured hereunder includes: (a) All obligations incurred in connection with the Note. (b) Any promissory note evidencing additional loans which the Bank may make from time to time to the Borrower, the Bank not being obligated, however to make such additional loans. 8 111111111111111111111111111 U U s V 3 997753 Book 1448 Page 103 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder Collateral to the Borrower. BOOK 4 4 8 PAGE x_04 (c) Any sums advanced, or expenses or costs incurred by the bank which are made or incurred pursuant to the terms of this Agreement, plus interest thereon at the rate specified in the Note or otherwise agreed upon from the date of advances or the incurring of such expenses or costs until reimbursed. (d) Any and all other indebtedness of the Borrower to the Bank, now or hereafter owing, whether direct or indirect, primary or secondary, fixed or contingent, joint or several, regardless of how evidenced or arising. (e) Any extensions or renewals of all such indebtedness described in paragraph 9(a) through (d) above, whether or not the Bank executes an extension agreement or renewal instruments. 10. Invalidity In the event that any term, provisions or condition of this Agreement or of the note is invalid or unenforceable, the same shall be deemed severable from the remainder of such terms, provisions or conditions which shall remain in full force and effect to the maximum extent permitted by law. 11. Governing Law This Agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Wyoming. 12. Revision of Interests If the indebtedness shall be fully paid and the covenants herein containing shall be fully performed, then all interests of the Borrower in the Collateral shall revert to the Borrower and the Bank's interest in said property shall cease; and upon request by the Borrower, the Bank shall execute such instruments as are necessary to reconvey the 111111111111111111111111111111111111111111111111111111111111 f 997753 Book 1448 Page 104 Recorded 3/20/2012 At 1:45 PM 9 Lucile K. Taylor, Converse County Clerk Recorder 13. Rights Cumulative Each and every rights, power and remedy herein given to the Bank shall be cumulative and not exclusive; and each and every right, power and remedy may be exercised from time to time and so often and in such order as may be deemed expedient by the Bank, and the exercise of any such right, power or remedy shall not be deemed a waiver of any other right, power or remedy. 14. Counterparts This instrument may be executed in counterparts by the parties hereof, and to facilitate recording, the signature pages of each identical instrument may be combined into one original document. 15. Binding Effect This Agreement shall bind and inure to the benefit of the parties hereto, their respective successors and assigns. IN WITNESS WHEREOF, we have hereunto set our hands and seals the day and year first above written. By signing below, Ronald Hando and Jerry Calley warrant and acknowledge that they have complete authority to bind Western American Resources, LLC under the controlling operating agreements of Borrower. In the presence of: 1111111111 II 1 III IIIII 1111111E1111 11111 111111 1 III 111111111 1111 997753 Book 1448 Page 105 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder WESTERN AMERICAN RESOURCES, LLC By. By: 10 lite I448PAGE 105 RONALD E. HAN I 0, MEMBER LLEY, JERRY MBER ku 5 k) d' BOoK 1.448 10 ATTESTE FIRST INTERSTATE BANK By: STATE OF COLORADO- ss COUNTY OF DENVER The foregoing instrument was acknowledged before me this r day of cevyibe 2011, by RONALD F. HANDO, MEMBER OF WESTERN AMERICAN RESOURCES, L referred to as the "Borrower" herein, as their free act and deed. STATE OF COLORADO ss COUNTY OF DENVER 11 N SUTHERLAN SST. VICE PR DENT Ndtary Public My commission expires: The foregoing instrument was acknowledged before me this day of “�r 2011, by JERRY CALLEY, MEMBER OF WESTERN AMERICAN RESOURCES, LLC and referred to as the "Borrower" herein, as their free act and deed. 1 1 1 1 1 111 I I I I 1 111111111 I I I I 1 1111111111 I I I I I I I I I I I 1 I I 1 1111111111111 00706 pu b Mission Opine 10/102014 Notary Public My commission expires: bn 10/164014 997753 Book 1448 Page 106 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder STATE OF WYOMING COUNTY OF foregoing instrument was acknowledged before me this /3 day of 2011, by JOHN SUTHERLAND, ASST. VICE PRESIDENT, of FIRST INTERSTATE BANK, referred to as the "Bank" herein, a Wyoming banking corporation, on b half of the corporation and attested to by NOTARY PUBLIC ,p��( 1 "i SEN 404 ii.I xl V�.. IY. e�.. COU4re Cif TRONA mmiss 4 A 03 2014 11111111III111III1111111111111111111111111Ills 11111 1111111111111 997753 Book 1448 Page 107 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder 12 00707 BOOKi 107 Notary T My commission expires i dO/V BOOK 1 4 4 8 PAGE 1 0 8 Exhibit "A" Attached to a made apart of the Western American Resources, LLC Mortgage, Security Agreement, Financing Statement and Assignment dated September 22, 2011 Converse County, Wyoming Township 35 North, Range 67 West Section 7: SWI /4NW 1 /4 'Section 8: SWI /4SW1 /4 Section 18: SWI /4NE1 /4 `,Section 18: NE1 /4SE1/4 Section 21: NW1/4NW1 /4 Lincoln County, Wyoming Township 24 North, Range 114 West Section 3: NW1 /4NW1 /4 Section 3: NW1 /4NW1 /4 Section 3: SW1 /4NE1 /4 Niobrara County, Wyoming Township 39 North, Range 63 West Section 11: SE1 /4SW1 /4 Township 38 North, Range 62 West Section 25: SW1 /4NE1/4 Sweetwater County, Wyoming Township 15 North, Range 112 West Section 24: SW1 /4SW1/4 Section 24: SWI /4SW1 /4 Section 23: NE1 /4SE1 /4 Section 25: NE1 /4NW1 /4 Section 26: SE1 /4NE1 /4 Township 26 North, Range 98 West Section 36: NE1 /4NE1/4 Township 15 North, Range 110 West Section 17: NE1 /4NE1 /4 Township 26 North, Range 97 West Section 32: SE1/4SW1/4 11111111 I I 1 111 I I 1 11111 11111 11111 11111 111111111111 I I 1 11111 1111 1111 ud7O8 997753 Book 1448 Page 108 Recorded 3/20/2012 At 1:45 PM Lucile K. Taylor, Converse County Clerk Recorder