HomeMy WebLinkAbout893044 RECEIVED
~3 7 .LINCOLN COUNTY CLERK
DEED OF TRUST, M(~t~.:.~Od,}~.,~CURITY, AGI~EEMB~%Fp, , .. - ,:'7..:. ~,?i 9: t., 8
ASSIGNMENT OF PRODUCTION AND FINANCING STATEMENT
(Oil & Oas)
Dated as of August 20, 2003
PLEASE RETURN DOCUMENTS WITH FILING INFORMATION TO
Hinkle, Hensley, Shanor & Martin, L.L.P.
P.O. Box 3580
Midland, Texas 79702-3580
Attention:
John C. Chambers, Esq.
THIS DOCUMENT CONTAINS AFTER ACQUIRED PROPERTY PROVISIONS.
THIS DOCUMENT CONTAINS A NOTICE OF SECURITY INSTRUMENT
AFFECTING REAL PROPERTY IN EACH COUNTY IN WHICH IT IS RECORDED.
THIS DOCUMENT SHALL BE EFFECTIVE AS A FINANCING STATEMENT
TO THE FULL EXTENT PERMITTED BY THE TEXAS UNlFORM COMMERCIAL CODE.
COLLATERAL INCLUDES THE COLLATERAL DESCRIBED HEREIN
OR ON EXHIBIT "A" ATTACHED HERETO
WELLS FARGO BANK TEXAS, N.A.
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
THE STATE OF WYOMING §
COUNTY OF LINCOLN §
DEED OF TRUST, MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF PRODUCTION AND FINANCING STATEMENT
KNOW ALL MEN BY THESE PRESENTS:
That on thc 20~ day of August, 2003, ~CoRKRAN ENERGY~ LP, a Texas Limited Partnership (acting by and through its sole General Panner, Hummingbird
hwestments, L.L.C., a Texas Limited Liability COmpany) an---~'Dennis D CORKRAN, individually, (hcreiu called "Grantor") whose address is 2219 Westlake Drive, Suite
120, Austin, Texas 78746. (herein collectively called "Grantor"), to secure payment and performance of the Obligation (hereinafter defined), and for and in consideration
of the sum of TEN AND NO/100 DOLLARS ($10.00) cash and other valuable consideration in hand paid to Grantor, the receipt and sufficiency of which me hereby
acknowledged, and for and in consideration of the debt and trusts hereinafter mentioned, has GRANTED, BARGAINED, SOLD, ASSIGNED, TRANSFERRED, and
5C0~ .,N~, E~YED,.a?,,by ,the~se pre..s~n~.d.o, es .GR~.. NT, ,B~R. G..A~IN, SELL, ASSIGN, TRANS_~F~R,_arlO_C~,~yLLiNS, TRUSTEE, whose address s
w. lexus, Midland, lexus 19101 [lleremalter cai ed the "Imstee") for file benefit of ~0/'ELLS FARGO BANK TE (hereinafi. er called "Beneficiary"), and
to the Trustee's successor or successors or substitutes in this trust, with power of sale, ~[[~_~1 l~}}6nal'~r~rties, rights, titles, interests, and estates described or to
which referance is made in Paragraphs 1 through VI, inclusive, below, whether now owned by Grantor or hereafter acquired by Grantor (herein collectively called the
"Mortgaged Property"), to-wit:
Paragraph I. Oil and Gas Leases and Other Propertieq. All of those certain mbteral interests, royalty interest, oil and gas and/or oil, gas and mineral leases, lands,
and other properties ( all such leases, lands, minerals, and royalty interests and other properties being herein called the "Subject Interests"), which are described and/or to
which reference may be made on Exhibit "A" attached to and made a pan of this Deed of Trust for all purposes and incorporated herein by reference as fully as if copied
verbatim in the body of this Deed of Trust at this point.
Paragraph II. pooled Interests. All rights, titles, interests, and estates now owned or hereafter acquired by Grantor in and to (i) any and all properties now or
hereafter pooled or Ulfitized with any of the Subject Interests, and (ii) all presently existing or future unitization, communitizafion, and pooling agreeme,lts, and the units
created thereby, which include all or any pan of the Subject Interests, including, without limitatiou, all units formed under or pursuant to any laws. The r ghts, titles, interest,
and estates described in this Paragraph Il shall also be included within the term "Subject Interests" as used herein.
Paragraph III. Hydrocarbons. All oil, gas, casingliead gas, drip gasoline, natural gasoline and condensate, all other liquid and gaseous hydrocarbons and all
other minerals, whether similar to the foregoing or not (herein collectively called "hydrocarbons"), now or hereafter accruing to or produced from the Subject Interests and/or
to which Grantor now or hereafter may be entitled as a result of or by virtue of its record and/or beneficial ownership of any one or more of the Subject Interests.
Paragraph IV. Contracts. All present and future rights of Grantor (including, without limitation, all rights to rece ye payments, in. clud ny, but not limited to,
lease bonuses, rents, tolls, incomes, and royalties) under or by virtue of all present and thture operating agreements, contracts for the purchase, exchange, processing,
transportation or sale of hydrocarbons, and other contracts and agreements relating in any way to all or any part of the Mortgaged Property as the same may be amended
or supplemented from time to time (the "Subject Contracts").
Paragraph V..Uti!er Property. All tenements, hereditameuts, appurtenances and properties in anywise appertaining, belonging, affixed, or incidental to the
Subject Leases, in which Grantor now owns or hereafter acquires an interest, including, without limitation, any and all property, real or personal, in which GrantOr now
owns or hereafter acquires an interest which is situated upon and/or used or usefui in connection with all or any pan of the Subject Leases and including all p penes,
gathering lines, trunk lines, lateral lines, pipdine easements and rights-of-way, compressors, dehydration units, separators, heater treaters, valves, flow lines, gauge meters
alarms, supplies, inachinery, derricks, buildings, tanks, casings, christmas trees, tubing, rods, liquid extractors, engines, boilers, toolsl appliances, cables, wires, surface
leases, rights-of-way, easements, servitudes, and franchises; and a I accessions, additions, substitutes and replacements to or for, and all accessories and attachments to any
of the foregoing (all such surface leases, easements, licenses, rights-of-way, aud franchises being herein called the "Subject Easemants," and all such tangible property
described in this Paragraph V being herein called the "Personal Property").
Paragraph VI. Other Rigl~ts to Hydrocarbo,~s Any and all other rights, titles, estates, royalties, and interests (whether or not presently included in the Subject
Interests) now owned or hereafter acquired by Grantor (a) in and to all hydrocarbons in and under and that may be produced and saved from the lands described or to which
reference is made in Exhibit "A" (the "Land"), and (b) in and to all reversions, remainder, tolls, rents, revenues, issues, proceeds earnings, income, and profits from the
land.
TO HAVE AND TO HOLD the Mortgaged Propeay, together with all and singul~ file rights, privileges, contracts, and appurtenances now or hereafter at any
rime before the foreclosure or release hereof in anywise appertaining or belonging thereto, unto the Trustee and to his successors or substitutes hereunder and to their
successors and assigns, forever, and Grantor hereby binds and obligates Grantor and GrantoPs successors to warrant and forever defend, all and singular, the Mortgaged
Property unto the Trustee and to his successors or substitutes hereunder and to their successors and assigns, against the lawful claims of any and all persons whomsoever
claiming or to claim the same, or any part thereof, SUBJECT, HOWEVER, ONLY to Permitted Liens.
This conveyance is made in trust, however, upon thc terms and provisions hereinafter set out to secure thc full and final payment and performance of the
Obligation.
To further secure the Obligation, Grantor hereby grants to WELLS FARGO BANK TEXAS, MIDLAND, N. A., whose address is 500 W. Texas, Midland,
Texas 79701, a security interest in the Mortgaged Property insofar as such Mortgaged Property consists of equipment, general intangibles, accounts, inventory, fixtures,
rights to receive payments and any and all other personal property 0fany kind or character defined in and subject to the provisions of the applicable Uniform Commercial
Code of each state where any o£such Mortgaged Property, and the proceeds and products thereof(being herein called the "CollateralS). Upon the happening of any default,
Beneficiary is and shall be entitled to all of the rights afforded a secured party by the applicable Code with reference to the Collateral, or Trustee or Beneficiary may proceed
as to both file real and personal property covered hereby. Such rights shall be cumulative s,ld under this Deed of Trust in respect to the real property covered hereby. Such
rights shall be cumulative and in addition to those granted to Trustee or Beneficiary under any other provision of this Deed of Trust or uuder any other instrument executed
in connection with or as security for all or any pan of the Obligation.
REFERENCE IS MADE TO SECTION 5.11 FOR THE DEFINITIONS OF SEVERAL OF THE TERMS USED HEREIN.
ARTICLE 1
SECURED OBLIGATION
This Deed of Trust, Mortgage, Security Agreement, Assignment of Production and Financing Statement (herein called the "Deed of Trust") is made to secure
and enforce the following note or notes, guaranty, obligations, indebtedness, covenants conditions agreements, loans, advances, debts, and liabilities (herein collectively
called the "Obligation"): ' '., ' '
Section 1.1 Credit Aereement. All indebfGdness and other obligations now or hereafter incurred or arising pursuant to thc provisions of that certain Credit
Agreement dated February 13, 2002, by and betweeu Grantor, Beneficiary, and Dennis Dwayne Corkran, as Guarantor, and all supplements thereto and amendmants 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
sonic may from time to time be supplemented, amended or modified, and all other agrcemeuts given in substitution therefor or in restatement, renewal or exte tsion thereof
in whole or in part, being hereinafter called tile. "Agreement"); '
Section 1.2 Note. That certain Term Note dated June 14, 2003 executed by Corkran Energy, L.P. and payable to the order of Beneficiary in the original principal
an~ount of One Million, Nine ttundred Thousand and NO/100 Dollars ($1,900,000.00), bearing interest as specified therein, being payable at Baneficiary's office in
Midland, Texas, or at such other office as Beneficiary shall direct in writing and, if not soouer matured (by acceleration or otherwise) finally maturing on June 30,2005.
WELLS FARGO BANK TEXAS, N,A.
2
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
Section 1.3 Other Obli~alion of Grantor. Any and all olher or additional indebtedness or ]iabififies for which Grantor is now or may hereafter become
~o B~n~fici~ a[ ~y time and ~om [imc to time, i ~ any manner either primarily or second~ily, absolutely or ~ntingcn~ly, di~c~ly or indirectly, jointly, severally,
and severally, and whether matured or unmMured, including aH indebtedness and liabilities now or hereafter arising directly ou~ of ~ransactions between Oramor and
Beneficia~ or acquired by Beneficia~ outright, conditionally or ~ collateral security from another Person and whether or not created after payment in ~11 of the not~
if this Deed of Trust shall not have been released of record by Beneficla~.
Section 1,40bliea~on ArisinE Under Securi~ Instruments. All indebtedness, obligations, coven.S, conditions, agreements, and liabilities arising pursuit
to the provisions, of this Deed of Trust and/or any other sccufi~ a~ccmen~ mo~gage, deed of trust, collateral pledge agreement, contract, ~signment, or credit agr~ment
of any kind now or hereafter existing ~ security for, executed in conn~tion with or related to the Obligation and/or any puff thereof (each such being herein called "other
securi~ instrument"). '
Section 1.5 Future Advances to Grantor. All loans and advances which Beneficiary may hereafter make to Grantor, which the Grantor and Beneficiary
contemplate niay be necessary from time to time. Such future advances, if any, shall be made on such conditions as Grantor and Beneficiary may negotiate, but it is
specifically agreed that Beneficiary has ,lot hereby agreed to advance any such additional sums.
Section 1.6 Costs and Ex crises. All sums advanced and costs and expenses incurred by Beneficiary, including without limitation, all.reasonable legal,
accounting, engineering, management, consulting or like fees, made and incurred in connection with the foregoing Sections 1. I, 1.2, 1.3, 1.4, and 1.5, or any part thereof,
or in connection with the acquisition, perfection, realization, maintenance, or preservation of the security therefor, or in connection with the following Section 1.7, or any
thereof, whether such advances, costs, or expenses shall have been made and incurred at the request of Grantor or Beneficiary.
Section 1.7 Renewals, Extension, and Rearram, ements. Any and all renewals, extensions, and/or rearrangements of all or any part of the notes, indebtedness,
obligations, debts, loans, advances, covenants, agreements, and liabilities described or to which reference is made in the foregoing Sections I. I, 1.2, 1.3, 1.4, 1.5 and 1.6.
ARTICLE 2
CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS OF GRANTOR
Section 2.1 Representations and Warranties. With knowledge that Beneficiary is relying on the representations and warranties made herein without
independent investigation, Grantor hereby covenants, agrees, represents, and warrants unto Beneficiary:
(a) Authority. Grantor has authority to execute this Deed of Trust, to grant, bargain; sell, mortgage, assign, transfer, and convey the Mortgaged
Property to the Trustee pursuant to t 1 s Deed of Trust, and to make tile covenants, representations, warranties, and assignments contained in this Deed of Trust.
(b) .Title. Grantor (1) has good and indefeasible title to, (ii) is lawful owner and holder of, and (iii) is possessed of the Mortgaged Property free and
clear of any and all liens except Permitted Liens.
(c) ~terests. With respect to each Mortgaged Property, the ownership of Grantor in such Mortgaged Property does and will, (i) with respect
to each well described in Exhibit A hereto in connection with such Mortgaged Property, (A) entitle Grantor lo receive (subject to the terms and provisions of this Mortgage)
a decimal share of the Production produced from, or allocated to, such well equal to not less than the decimal share set forth in Exhibit A in connection with such well
opposite the words "Net Revenue Interest" (or words of similar import), (B) cause Grantor to be obligated to hear a decimal share of the cost of exploration, development
and operation of such well ,lot greater than the decimal share set forth in Exhibit A ill connection with such well opposite the words "Working Interest" (or words of simitar
import) and (ii) if such Mortgage Property is shown in Exhibit A to be subject to a unit or units, with re, peet to each such unit, (A) entitle Grantor to receive (subject to
the ten'ns and provisions of this Mortgage) a decimal share of Production produced from, or allocated to, such unit equal to not less than the decimal share set forth in Exhibit
A ill connection with such Mortgaged Property opposite the words "Unit Net Revenue Interest" or words of similar import (and if such Mortgaged Property is subject to
more than one trait, words identifying such interest with such unit), and (B) obligate Grantor to bear a decimal share of the cost of exploration, development and operation
of such unit not greater than the decimal share set forth in Exhibit A in connection with such Mortgaged Property opposite the words "Unit Working Interest" or words of
similar import (and ifsuch Mortgaged Property is subject to more than one unit, words identifying such interest with such unit); st, ch shares of Production which Grantor·
is entitled to receive, and shares of expenses which Grantor is obligated to bear, are not and will not he subject to change (other than changes which arise pursuant to non-
consent provisions of operating agreements described in Exhibit A in connection with such Mortgaged Proper' es, respectively, in connection with operations hereafter
proposed) except, and only to tile extent that, such changes are reflected in Exhibit A. There is not and will not he any unexpired financing statement covering any part
of tile Property on file itl any public office naming any party other than Lender as secured party. Tile execution, delivery and performance of this Mortgage and tile creation
of tile liens hereunder do not violate any provision or constitute a default under any operating agreemenl or other instrument which affects any Mortgaged Property or to
which Grantor is a party.
(d) Advance Payment Contract, Grantor is not a party to any Advance Payment Contract affecting or relating to any of thc Subject Interests not
heretofore disclosed to Beneficiary in writing.
(e) Enviromnental.
(i) Current Status. Tile Property and Grantor and, to the best knowledge o£Grantor, any property adjoining the Property are not in violation ofor
subject to any existing, pending or, to the best know edge of Grantor, threatened investigation or inquiry by any governmental antbority or to any remedial
obligations under any applicable laws or regulations pertaining to health or tile environment (such applicable laws or regulations as they now exist or are hereafter
enacted and/or amended hereinafter sometimes collectively called "Applicable Environmental Laws"), including without limitation the Comprehensive
Environmental Response, Compensatioo, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (as amended,
hereinafter ca{led "CERCLA"), tile Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste
Disposal Act Amendments of 19801 and tile Hazardous and Solid Waste AmendmenB of 1984 (as amended, hereinafter called "RCRA"), by tile applicable laws
and [egulations promulgated by the State of New Mexico, and this representation will continne to be true and correct following disclosure to the applicable
governmental antborities of all relevant facts, conditions, and circumstances, if any, pertaining to the Property and Grantor. Grantor undertook, at the time of
acquisition of tile Property, all appropriate inquiry into tile previous ownership and uses of the Property consistent with good commercial or customary practice
to determine if the Property is in violation of any Applicable Environmental Laws. Grantor has taken all steps necessary to determine and has determined that
no hazardous substances or solid wastes bare been disposed of or otherwise released on or to the Property except in accordance with Applicable Environmental
Laws. Tile use which Grantor makes and intends to make of the Property will not result in tile disposal or other release of'any hazardous substance or solid waste
on or to the Property except in accordance with Applicable Environmental Laws. The terms "hazardoos substance" and "release" as used in this Mortgage shall
have tile meanings specified in CERCI~,, and tile terms "solid waste" and "disposal" (or "disposed") shall have the meanings specified itl RCRA; provided, in
tile event either CEP, CLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and provided fi~rther, to tile extent that tile applicable laws and regulations promulgated by the State of New Mexico or other
.applicable jurisdiction establish a meaning for "hazardous substance," "release," "solid waste," or "disposal" (or "disposed") which is broader than that specified
tn either CERCLA or RCILi, such broader meaning shall apply. Tile "Associated Property" (as hereinafter defined) is not in violation of any Applicable
Environmental Law for which Grantor or its predecessors in interest in the Property woold be responsible. As used in this Mortgage, the term "Associated
Property" means any and all real and/or personal property interests in and to.(and/or carved out o0 the lands which are described or referred to as Exhibit A
hereto, or which are othe~vise described in any of the oil, gas and/or mineral leases or other instruments described or referred to in such Exhibit A.
(ii) Future Performance. Grantor will not cause or permit the Property, the Associated Property or Grantor to be in violation of, or do anything or
permit anything to be done which will subject tile Property or the Associated Property to any remedial obligations under any Applicable Environmental Laws,
including without limitation CERCLA, RCP, A, tile Toxic Substance Control Act, the applicable laws and regulations promulgated by the State of New Mexico,
assuming disclosure to the applicable governmental anthorities of all relevant facts, conditions and circumstances, if any, pertaining to the Property or Associated
Property and Grantor will promptly notify Beneficiary in writing of the presence of any hazardous substance or solid waste on tile Property or Associated Property
and of any exisfing, pending or, to the best know edge of Grantor, threatcoed investigation or inquiry by any governmental authority in connection with any
Applicable Environmental Laws. Grantor will take all steps necessary to determine that no hazardous substances or solid wastes have been disposed of or
otherwise released on or to the Property or Associated Property except in accordance with Applicable Environmental Laws. Grantor will not cause or permit
file disposal or other release of any hazardous substance or solid waste on or to the Property, or the Associated Property or any property adjoining the Property
except in accordance with Applicable Environmental Laws and covenants and agrees to keep or cause the Property and the Associated Property to be kept free
of any hazardous substance or solid waste and to remove the same (or if removal is prohibited by law, to take whatever action is required by law) prompt[y upon
discovery at its sole expense. Without limitation of the Beneficiary's rights to declare an event of default hereunder and to exercise all remedies available by
WELLS FARGO BANK TEXAS, N.A. DEED OF TRUST, MORTGAGE,
3 ASSIGNMENT OF PRODUCTION
reason thereof, in ~c event Gr~tor fails to comply with or perfo~ ~y of~e foregoing covcn~ and obligalions, ~c Bcncfici~ may (withoUt ~y obligation,
express or implied) remove ~y h~dons subst~ce or solid w~te ~om ~c Prope~ or the Associated Prope~ (or if removal is prohibited by law, rake wha~ver
action is required by law) and thc cost of thc removal or such other action shall be a demand obligation owing by Grantor to lhc Bcncficia~ pursuant to this
Moagage and shall bc subject to and covered by thc provisions of paragraph 1.2 hereof. Grantor grants [o Bcncficia~ and its agcnls~ employees, contractors
~d consul~n~ access to thc Propc~ and thc ~sociatcd Propeay and thc license (which is coupled with an interest and i~cvocablc while ~is Moagagc is in
effect) to remove ~c b~mdons substance or solid w~te (or if removal is prohibited by law, to take whatever action is required by law) and agrees to indcmni~
and hold Bcncfici~ h~less ~om all cos~ ~d expenses involved thercwi~. Upon Bcncficia~'s rc~onablc rcqucsl, at any lime and flora lime to dmc during
thc existence of this MoagagC, Gramor will provide at Grantor's sole expense an inspection or audit of ~c Property and the Associated Propc~ from an
engineering or consulting fi~ approved by Bencfici~, indicating thc presence or absence of h~mdous subslanccs and solid w~te on thc Property. If Gr~tor
fails to provide same after ten (10) days' noticc~ Bcncficia~ may order same, and Grantor grants to Bencfici~ and i~ employees, agents, contractors ~d
consult~ access to thc Prope~ and thc ~sociated Propc~ and a license (which is coupled wilh an interest and i~cvocablc while this Moagagc is in effect)
to pcffo~ inspccti0n ~d tcs~. ~e cost of such inspections ai~d tests sh~l be a demand obligation owing by Gr~tor to Bcncficia~ pursuam [o lhis Moagagc
and sh~l bc subject to ~d covered by ~c provisions ofpmagraph 1.2 bercof. ~c B~cfici~'s ri~ und~ ~is p~a~aph mc fur ~c sole purpose of protecting
· c Bencfici~'s securiW for thc repayment of the secured indebtedness ~d sh~l not under ~y circums[ancc bc construed ~ granting thc right to p~icipatc
or constitute p~icipation in thc management of the Property or the business conducted thereon.
(0 Comp anco with Applicable Eaw~. Grantor represents that, to thc best of his knowledge, Gr~tor is cu~ently in compliance with all appiicablc
laws, ordinances, rules ~d regulations governing Grantors o~crship, use ~d operation of thc Mortgaged Pro,ay.
Section 2.2 Covenants of Grantor. Grantor, tbr Grantor and Grantor's successor, covenants and agr~s to:
(a) ~ddit ona Docnq~ents. At any time, and from time to time, upon request by Benefici~, fo~hwith execute and deliver to Benefici~ ~y ~d
all addition~ ins~uments and ~her assurances, ~d do all acts and things, hs may be necess~ or proper, in Benefici~'s opinion, to effect the intent of these presents
~d to evidence and perfect more ~lly the rights and liens herein created and intended to be created and to protect the tights of Beneficia~ hereunder.
(b) ~xistence and Authority. If applicable, continuously mainlain in good standing Grantor's limited p~nership existence in the State of Text.
(c) Cu~ of Defect. lft~e validiW or prioriW of~is Deed of Trust or of any righ~ or liens created or eviden~d hereby with respect to ~e Mo~gag~
Prope~ or any material p~ thereofsh~l be endangered or qu~tioned, or shall be attacked directly or indirectly, or if any legal proceedings ~e instituted against Gr~tor
with respect ~ereto, give ~iaen notice there0fwithin three (3} busioess days of such event to the Beneficia~ and, at Grantor's o~ cost ~d expense, diligently endeavor
to cure any defect that may be developed or claimed, and take all necess~ and proper steps for the defense of such legal proceedings, including, but not limited to, the
employment of counsel acceptable to Benefici~, the prosecution or defense of litigation and the release or discharge of all adverse claims, ~d T~nstec ~d Benefici~,
or eider of them (whe~er or not n~ed ~ p~ies to leg~ proceedings with respect thereto), are hereby authorized and empowered to take such additional steps ~ in ~eir
judg~nent and discretion may be necess~ or proper for the defense of any such lega proceedings, including, but mt rotted to, the prosecution or defense of litigation,
~d the cmnpromise or discharge of any adverse claims made with respect to the Mo~gag~ Prope~y, and all ex~nse so incurred ofeve~ kind and ch~acter shall be a
dem~d obligation owing by Gr~tor to Beneficial.
(d) Notice of Claims. Provide Beneficia~ within three (3) business days of such event wriUen notice of any (i) claim, action, notice, suspension,
or proceeding which could, in the event of~ unfavorable outcome, have a material adverse effect on the business ~d fin~cial affairs of Grantor or on ~e abili~ to ~lly
perfurm ~d abide by ~e te~s, coven,S, m~d conditions hereol~ (ii) change in any material fact or circumstance stated, covenanted, represented, or warr~ted herein or
in ~y of the docu nen~ con~mplated hereby, or (iii) default in or acceleration of any of Grantors obligalions of payment or performance of which would have a material
adverse effect on Grantor's bnsin~ss or fin~cial affairs.
(c) payment of Taxes. Pay, or cause to be paid, before delinquent, all lawful taxes in respect to thc Mortgaged Property, or any part thereof, and from
time to time, upon request of Beneficiary, to furnish to Beneficiary evidence satisfactory to Beneficiary of the limcly payment of such taxes.
(f) ,Comp anco with Subiect Leases~ Interests~ Contracts~ and Easemenl'~, Timely perform all obligations under, and not violate any of, thc Subject
Leases, Subject Interests, Subject Contracts, or Subject Easements.
(g) Maintenance of MortAaged Property. At all t ]]cs ma main, preserve, and kccp thc Mortgaged Property in good repair and condition, and from
time to time, to make all necessary and proper reps rs, replacements, and renewals, and not to commit or permit any waste on or of the Mortgaged Property, and to do
anything to the Mortgaged Property that may impair [ts value.
(h) Payment for Labor and Materials. Promptly pay all bills for labor and materials incurred in connection with the Mortgaged Property and never
permit to be fixed against thc Mortgaged Property, or any part thereof, any lien, even though inferior to thc lien hereof, for any such bill which may be legally due and
payable, except a Permitted Lien.
(i) .Performance of Obli!~ation. Pay and perform all of the Obligations.
O) Mortgage Taxes. At any time any laTM shall be enacted imposing or authorizing the imposition of any tax upon this Deed of Trust, or upon any
lien created hereby, immediately pay all such taxes; provided that, in the alter ~at ye, Grantor may, in the event of the enactment of such a law, and must, if it is unlawful
for Grantor to pay such taxes, prepay that portion of the Obligation which Beneficiary in good faith deter~nines is secured by property covered by such law with 60 days
after demand therefor by Beneficiary.
(k) Performance of Covenants. Punctually and properly perform all of Grantor's covenants duties and liabilities under this Deed of Trust and any
other security instrument. ' '
(I) Inspection of Mortgaged Property. Allow Beneficiary to inspect thc Mortgaged Property and all records relating thereto, and to make and take
away copies of sucb records.
(m) Operation of Mortgaged Property. Operate the Mortgaged Property, or cause it to be operated, in a careful and efficient manner in accordance
with the practices of the industry and in compliance with all Subject Leases, Subject Contracts, Subject Easements, and laws.
(n) Development Work. Do, or cause to be done, such development and other work as may be reasonably necessary to protect from diminution and
productioo capacity of the Mortgaged property and producing wells thereon.
(o) Maintenance ofLeases~ ,Contracts~ and Easemeui's Maintain all Oil and Gas Leases, Oil, Gas & Other Mineral Leases, Subject Interests, Subject
Contracts, and Subject Easements in full force and effect and not permit to occur the surrender, abandooment, release, or termination of any Subject Interest, Subject
Contracts, or Subject Easements, so long as the Subject Interests covered thereby or relating thereto are capable of producing hydrocarbons in paying quantities.
(p) Insurance. Carry insurance with respect to the Mortgaged Property with such insurers, in such amounts, and covering such risks as shall be
customary in the industry, cause all insurance so carried to be payable to Beneficiary as its interest may appear; deliver the policies of insurance to Benefieia~ and pay
or cause to be paid all premiums for such insurance at least 15 days before such premiums become due, furnish to Beneficiary satisfactory proof of the timely making of
such payments, and deliver all renewal policies to Beneficiary at least 15 days belbre the expiration date of each expiring policy.
(q) Compliance with Laws. Comply with all laws, ordinances, roles and regulations applicable to the Mortgaged Property and its ownership, use and
operation, including, but not limited to the applicable rules of the Texas Railroad Commission.
(r) .A.d,.d tonal Reports. From time to time, upon request of Beneficiary, promptly furnish to Beneficiary such financial statements and reports relating
to the Mortgaged Property as Beneficiary may request.
(s) Sales of Mortgaged Property. Not, without the prior written consent of Beoeficiary, sell, trade, transfer, convey, assign, exchange, pledge,
encumber, or create any lien (except a Permitted Lien) with respect to or otherwise dispose of the Mortgaged Property or any part thereof, except items of Personal Property
WELLS FARGO BANK TEXAS, N.A. DEED OF TRUST, MORTGAGE,
4 ASSIGNMENT OF PRODUCTION
or airy parl thereof which have become obsolete or ~vom beyond practical use and which have been replaced by adequate substitutes having a value equal to or greater than
the replaced items when new.
(t) Title Opinions. Furnish to Beneficiary copies of any title opinions and any abstracts of title requested by Beneficiary from time to time that Grantor
has or may hereafter obtain affecting any part of the Mortgaged Property.
(u) Principal Office. Maintain the principal office and place of business Of Grantor with all of Grantor's·records and files relating to tile Mortgaged
Property in Travis County, Texas, except for those customarily maintained at the Mortgaged Property.
(v) Advance Payment Contract. Not enter into or agree to any Advance Payment Contract with any person affecting any of the Mortgaged Property.
It is expressly stipulated that as a conditinn of granting approval of any Advance Payment Contract Beneficiary may, in its discretion, require that any Advance Payment
be paid to Beneficiary in whole or in part for application toward payment of the Obligatim] or may require that any portion of any Advauce Payment not thus applied on
the Obligatinn be Placed in escrow with Beneficiary to insure nsc thereof as Beneficiary may direct or determine, or Beneficiary, in its sole discretion, may impose other
conditions upon such consent or may refuse to consent to tile nraking of such Advance Payment Contract. Whether or not Beneficiary's consent to an Advance Payment
Contract heretofore and hereafter made by Grantor has been obtained, and regardless of whether the existence or making of such Advance Payment Contract constitutes
a breach of Grantor's representations or covenants herein contained, it is expressly stipulated that unless otherwise expressly agreed in writing by Beneficiary, all Advance
Payments hereafter becoming due to Grantor under any Advance Payment Contract shall be deemed proceeds of sale of hydrocarbons from the Mortgaged Property for
purPoses hereof, which are assigned to and are to be paid over to Beneficiary, and Beneficiary's receipt or acceptance of any such Advance Payment or application thereof
toward payment of the Obligation shall not constitute a waiver of any default resulting from the existence of making of the Advance Payment Contract pursuant to which
st, ch Advance Payment is made or a ratification or approval by Beneficiary of such Advance Payment Contract..
(w) Properties Not Operated by Grantor. Anything in this Section 2.2 to the contrary notwithstanding, Grantor, with respect to those Subject Interest
which are operated by operators other than Grantor, shall not be obligated itself to perform undertakings performable only by such operators and which are beyond the control
of Grantor. In each such case, however, Grantor will. promptly take all actions available to it, under applicable operating arrangements or otherwise, to bring about tile
performance of any such undertakings required to be performed by such operators.
(x) Compliance with Environmental Laws. GrantOr is and will remain in substantial compliance with all state and federal environmental laws and
regulations and Grantor will not place nor permit to be placed any Hazardous Materials on any of its Mortgaged Property in violation of applicable state and federal
environmental laws. In tile event Grantor should discover any Hazardous Materials on any of its Mortgaged Property which could result in a breach of the foregoing
coveum~t, Grantor shall notify Beneficiary within three (3) days after such discovery. Grantor shall dispose of all material amounts of Hazardous Materials generated by
the Grantor only at facilities and/or with carriers that maintain valid governmental permits under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901. In the
event of any notice or filing of any complaint or commencement of any administrative hearing or procedure (an "Environmental Proceeding") against tile Grantor alleging
a violation of an environmental law or regulation, Grantor shall give notice to Beneficiary within five (5) days after Grantor has received such notice or has knowledge of
such filing.
(y) Appraisals. Grantor hereby authorizes Lender, in its sole discretion, to obtain new or updated appraisals of the mortgaged property, not more often
than annually, at Borrower or Grantor's expense, so long as any part of the Indebtedness is secured by the mortgaged property.
ARTICLE 3
DEFAULTS AND REMEDIES
Section 3.1 Defaults. The term "default," as used herein shall mean: (a) failure of Grantor to observe or perform any covenant or agreement contained in this
Deed of Trust; (b) the failure of Grantor to pay when due any instalhnent of principal or interest on the Obligation, or any part thereof, as and when tile same shall be dt, e
and payable (whether at stated maturity, by acceleration, or othe~vise); (c) failure by Grantor to comply with any agreement with Beneficiary; (d) the occurrence of any
egent or condition which results in, or with lapse of time or service of notice or both could resu[t in a default in the payment of any indebtedness or the performance of any
obligation to Beneficiary made herein or otherwise; (e) the discovery by Beneficiary of the incorrectness of any material representation or warranty made to Beneficiary;
(f) the liquidation, termination, death, or dissolution of Grantor; (g) the occorrence of an event causing material loss or depi'eciation in the Collateral's value (whether by
casualty, actions by goverumenta[ authorities, loss of perm ts, nut ~orities, franchises certificates or rights or otherwise) and Grantor's failure to within ten (10) days of
demand by Beneficiary, either provide enough additional Collateral or a reduction in the total indebtedness by an amount suffic ent to satisfy Beneficiary; (h) the occurrence
of any claim, action, notice, suspension, or proceeding which affects all or part of the C'ollateral or the security interest or liens granted to Beneficiary; (i) the occurrence
of the default in or acceleration of any of Grautor's obligations of payment or perfomrance under any instrument or obligation, the default in or accelerated payment or
perfomlance of which would, in Beneficiary's good faith option, have a material adverse effect on Grantor's business or financial affairs or on the abifity to fully perform
and abide by the terms, covenants, and conditions hereof, or would be a default under any agreement between Grantor and Beneficiary; 0) the application for, or consent
to tile appointment ora receiver, trustee, custodian, or liquidator for Grantor or any of Grantor's properties; (k) the seeking by Grantor or the protection of any bankruptcy,
insolvency, reorganizatiou; composition, moratorium, or similar proceeding; (I) the admission in writing of Grantor's inability to pay its debts as they regularly mature;
(u]) the filing of an answer admitting the material allegations 0fa petition filed against Grantor in any bankruptcy, insolvency, reorganization, composition, moratorium,
or similar proceedh]g; and to remain undismissed for more than thirty (30) days; (n) the permitting of any involuntary petition in bankruptcy to be filed against Grantor
and to remain undisrnissed for more than thirty (30) days; (o) Grantor being made a party to an Environmental Proceeding, wbich Beneficiary, in good faith, believes that
may result in an adverse ruling against Grantor, which will in turn affect Grantor's ability to repay the Obligation or any Part thereof; (p) the permitting of any attachment,
sequestration, garnishment, execution, or similar proceeding against Grantor or any of Grantor's properties to remain undismissed for more than thirty (30) days; or (q)
the making of any assigmnent for the benefit of creditors.
Section 3.2 Remedies. Ifa Default shall occur and be continuing, Beneficiary may, at its option, do any one or more of the following to the extent permitted
by app icab e law:
(a) Payment or Performance by Beneficiary. If Grantor has failed to keep or perform any covenant whatsoever contained in this Deed of Trust or
any other security instrument, Beneficiary may, but shall not be obligated to any person Io do so, perform or attempt to perform such covenant, and any payment made or
expense incurred in tile performance or attempted performance of any such covenant shall be a part of the Obligation, and Grantor promises, upon demand, to pay to
Beneficiary, at the place where the Note is payable, or at such other place as Beneficiary may direct by written notice, all sums so advanced or paid by Beneficiary, with
interest at tile tiighest Lawfid Rate, from the date when paid or incurred by Beneficiary m]til paid by Grantor. No such payment by Beneficiary shall constitute a waiver
of any default. In addition to tile liens hereof, Beneficiary shall be subrogated to all rights and liens securing tile payment of any debt, claim, tax, or assessment for the
payment ofwbich Beneficiary may make an advance, or which Beneficiary may pay.
(b) Acceleration. Beneficiary may, at its option, declare the aggregate unpaid principal amount of and interest on the Note and all other parts of the
Obligation to be, and the same shall thereupon become, immediately due and payable without presentment, demand, protest, notice of acceleration, notice of intent to
accelerate, notice of protest or notice of dishonor, or any other notice of any kind, all of which are expressly waived by Grantor.
(c) Foreclosure. Beneficiary may request Trustee to proceed with foreclosnre, and in such event Trustee is hereby authorized and empowered, and
it shall be his duty~ upon such request of Beneficiary, and to the extent permitted by applicable law, to sell all or any part of the Mortgaged Property at one or more sales,
as an entirety or in parcels, at such place or places and otherwise in such manner and upon such notice as may be required by applicable law, or in the absence of any such
requirement, as Trustee and/or Beneficiary may deem appropriate, and to make conveyance to the purchaser or purchasers thereof. Any sale of the'Mortgaged Property
or any part of the Mortgaged Property shall be made to the highest bidder or bidders for cash, at file courthouse door of, or at such other place as may be required or permitted
by applicable law in, the county (or judicial district) in the state wherein the land included within the Mortgaged Property to be sold is situated; provided that if the land
is situated in more than one county (or judicial district) of any state, such sale of the Mortgaged Property, or any part thereof, may be made in any county (or judicial district)
in the state wherein any part of the land included within the Mortgaged pruperty to be sold is situated. Any such sale shall be made at public outcry, on the' day of any month,
during the hottrs of st, ch day and after written notice thereof have been publicly posted in such places and for such time periods and after all persons entitled to notice thereof
bare been sent such notice, all as reqnired by applicable law in effect at the time ofsoch sale; and nothing herein shall be deemed to require Beheficiary or Trustee to do,
and Beneficiary and Trustee shall not be required to do, any act other than as required by applicable law in effect at the time of such sale. Any such sale may be as a whole
or in such parcels as Trustee may select. After such sate, Trustee shall make to the purchaser or purchasers thereunder good and sufficient deeds and assignments, in the
name of Grantor, conveying the Mortgaged Property, or part thereof, so sold to the purchaser or purchasers with general warranty of title (subject to Permitted Liens) by
Grin]tot. Sale ora part of the Mortgaged Property shall not exhaust the power of sate, but sales may be made from time to time until the Obligation is paid and performed
in fidl. It shall not be necessary to have present or to exhibit at any such sale any of the Collateral. In addition to tbe rights and powers of sale granted under the preceding
provisions of this Subsection 3.2(c), if default is made in the payment of any installment of the Obligation, Beneficiary, at its option, at once or at any time thereafter while
any matured installment remains unpaid, without declaring the entire Obligation arid the liens securing its payment, in the same manner, on the same terms, at the same
WELLS FARGO BANK TEXAS, N.A.
S
'DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
place and time, and after having given notice in the sante manner, al~ as provided in the proceeding provision of this Su6section 3.2(c). A~er such sale, Trustee shah make
due conveyance to the purchaser or purchasers. Sales made without maturing tile Obligation may be made hereunder whenever there is a default in thc payment of any
installmeot of the Obligation without exhausting the power of sa c granted hereby, and without affecting iu any way the power of sale granted under this Subsection 3.2(c)
on the unmatured balance of thc Obligation (except as to any proceeds of any sale which Beneticiary may apply as a prepaymeut on tile Obligation) or the liens securing
payment of the Obligation. It is intended by each of the foregoing provisions of this Subsection 3.2(c) that Trustee ,nay, after any request or direction by Beocficiary, sell,
not only the Subject Interests included within, but also all other items constituting a part of, the Mortgaged Property, or any there of, along with the land, or any part thereof,
included within the Mortgaged Property all as a unit and as a part ora single sale, or ,nay sell any part of the Mortgaged Property separately from the reminder of thc
Mortgaged Property. It is agreed that, in any deed or deeds giveo by Trustee, any and all statcnlcnts of fact or other recitals therein made as to the ident ty of Beneftciary,
or as to the occurrence or existence of any default, or as to the acceleration of thc maturity of the Obligation, o}' as to the request to sell, notice of sale, time, place, terms,
and manner of sale; and the receipt, distribution, and application of the money realized therefrom, or as to thc due and proper appoinbncnt ora substitute trustee, and without
being limited by the foregoing, as to any other act or thing having been duly done by Beneficiary or by Trustee, shall be taken by all courts of law and equity as prima facie
evidence that thc said statements or recitals state facts and arc without further question to bc so accepted, and Grantor does hereby ratify and confirm any and all acts that
Trustee may lawfully do in thc premises by virtue hereof, or his failure, refusal, or inability, for any reason, to make any such sale or to perform any of thc trusts herein
declared, or, at thc option of Beoeficiary, without cause, the Beneficiary may appoint, in writing, a substitute trustee, who shall thereupon succeed to all the estates, titles,
rights, powers, and trusts herein granted to and vested in Trustee. Such appoinm]ent may bc made on behalfofBeocficiary, in the event of the resignation (such resignation
being hereby authorized for any reason) or death of any such substitute trustee, or his failure, refusal or inability to make such sale or perform such trusts, or, at thc option
of Beneficiary, without cause, sqccessive subst tute trustees may thereafter, from fimc to time, be appointed by Beneficiary in the same manner. Wherever herein the word
"Trustee" is used, the same shall mean the person who is thc duly appointed trustee or substitute trustee hereunder at the time in question.
(d) Sui_.__!. Beneficiary may, or Trustee may upon written request of Beneficiary, proceed by suit or suits, at law or in equity, to enforce thc payment
and pcrfommnce of the Obligation in accordance with the terms hereof, oflhc notes or thc other security instruments, or other documents and/or writings securing and/or
evidencing it, to foreclose the liens and this Deed ofT. rust as against all or any part of thc Mortgaged Property and to have all or any part of thc Mortgaged Property sold
under the judgment or decree ora court o£competeot jurisdiction.
(e} Appointment ofRecciver. Beocficiary, as a matter or right and without regard to the sufficiency of thc security, and without any showing of
insolvency, fraud or mismanagement on thc part of Beneficiary, and without the necessity of filing any judicial or other proceeding other than the proceeding for appointment
of a receiver, shall be entitled to the appointment of a receiver or receivers of the Mortgaged Property, or any part thereof, and of the income, rents, issues and profits thereof.
(f) Possession of Mortgaged Property. Beneficiary may enter upon the Land included within the Mortgaged Property, take possession of the Mortgaged
Property, and remove the Personal Property included within the Mortgaged Property, or any part thereof, with or without any responsibility or liability on the part of
Beneficiary, take possession of any property located on Or in the Mortgaged Property which is uot a part of the Mortgaged Property and hold or store such property at
Orantor's expense.
(g) Assemble Collateral. Beneficiary may require Grantor to assemble the Collateral included within the Mortgaged Property or any part thereof,
and make it available to Beneficiary at a place to be designated by Beneficiary which is reasonably convenient to Grantor and Beneficiary.
(h) pispos tion of Collateral. After notification, if any, as hereafter provided itl this Subsection 3.2(h), Benefic ary may sell, lease or otherwise dispose
of, at the office of Beneficiary, or on the Land, or elsewhere, as chosen by Beneficiary, all or any part of the Collateral included within the Mortgaged Property, in its then
condition, or following any commercially reasonable preparation or processing and each sale [as used in this Subsection 3.2(h), the term "sale" means any such sale, lease,
or other disposition made pursnant to this Subsection 3.2(h)may be a unit or iu parcels, by public or in private proceedings, and by way of one or more contracts, and, at
any sale, it shall not be necessary to exhibit the Collateral, or part thereof, being sold, leased or otherwise disposed of The sale of any pm of the Collateral shall not exhaust
Beneficiary's power of sale, but sales may be made from. time to time until the Obligation is paid and performed in full. Reasmrable notification of the time and place of
any public sale pursuant to this Subsection 3.2(h), or reasonable notification of the time after which any private sale is to be made pursuant to this Subsection 3.2(h), shall
be sent to Grantor and to any other person entitled under the applicable Code to notice. It is agreed that notice sent or given not less than twenty-one (21) calendar days
prior to the taking of the action to which the notice relates, is reasonable notification and notice for such purposes of this Subsection 3.2(h).
Section 3.3 Purchase of Mortgaged Pror}ertv by Beneficiary. If Beneficiary is the purchaser of the Mortgaged Property, or any part thereof(and it is specifically
agreed that Beneficia~ may be the pumhaser of the Mortgaged Property, or any part thereof, if pemlitted by applicable law), at any sale thereof, whether such sale be under
the power of sa e hereinabove vested in Trustee, or upon any other foreclosnre of the liens hereof, or otherwise, Beneficiary shall, upon any such purchase, acquire good
title to the Mortgaged Property so purchased, free of the liens of these presents.
Section 3.4 Operation of Properties by Beneficiary. Should any part of the Mortgaged Property come into the possession of Beoeficiary, whether before or
after default, Beneficiary may use or operate the Mortgaged Property for the purpose of preserving it or its value, pursuant to the order of a court of appropr ate jurisdiction,
or in accordance with any other rights held by Beneficiary in respect to the Mortgaged Property. Grantor covenants promptly to reimburse and pay to Beneficiary, at the
place where notes are payable, or at such other place as may be designated by Beneficiary in writing, the amount of all reasonable expenses (including the cost of any
insurance, taxes, attorney's fees of the Beneficiary and other charges) incurred by Beneficiary in connection with its custody, preservation, use or operation of the Mortgaged
Property, together with interest thereon from the date incurred by Beneficiary at the Highest Lawful Rate, and all such expenses, cost, taxes, interest and other charges shall
be a part of the Obligation. It is agreed, however, that the risk of loss or damage tO the Mortgaged Property is on Grantor, and Beneficiary shall have no liability whatever
for decline or diminution in value of the Mortgaged Property, nor for failure to obtai,~ or maintain insurance, nor for failure to determine whether any insurance ever in force
is adequate as to amount or as to the risks insured.
Section 3.5 possession of Property After Foreclosure In case thc liens hereof shall be foreclosed by Trustee°s sale, or by other judicial or nonjudicial action,
tile purchaser at any such sale shall receive, as an incident to his ovmership, immediate possession of the Mortgaged Property, or any part thereof so conveyed, and,
subsequeot to foreclosure, Grantor and Grantor's successors shall be considered as tenants at sufferance of tile purchaser at foreclosure sale, and anyone occupying the
property after demand made for possessi6n thereof shall be guilty of forcible detainer and shall be subject to eviction and removal, forcible, or otherwise, with or without
process of law, and all damages by reason thereof are hereby expressly waived.
Section 3.6 Application of Proceeds. The proceeds from any sale, lease or other disposition made pmsuant to this Article 3, any proceeds of hydrocarbons
collected by Beneficiary pursuant to Article 4; and sums received pursoant to Section 5.5 shall be applied by Trustee, or by Beneficiary, as the case ,nay be, to the payment
or prepaymont of the Obligation, whether or not matured, as may be determined by the Beneficiary in its sole discretion until the Obligation is paid in full.
Section 3.7 Abandonment of Sale. In the event a foreclosure hereunder should be commenced by Trustee in accordance with Subsection 3.2(c), Beneficiary
may at any fime before the sale direct Trustee to abandon the sale, and may then institute shit for collection oftbe Obligatiou, and/or for the foreclosure of the liens hereof.
ffBeneficiary should institute a suit for the collection of the Obligation, and/or for a foreclosure of the liens hereof, it may at any time before the entry of a final judgment
itl said suit dismiss the same, and sell and/or require Trustee to sell (and the Trustee is hereby expressly authorized to sell) the Mortgaged Property, or any part thereof,
in accordance with tile provisions of this Deed of Trust.
Section 3.8 Waiver of Appraisement and Redeq~pfion. To the full extent Grantor may lawfully do so, Grantor agrees that Grantor will not at any time insist
upon, plead, claim or take the benefit or advantage of any appraisement, valuation, stay, extension or redemption laws, now or hereal~er in force, in order to prevent or hinder
the enforcemeot of this Deed of Trust or the absolute sale of the Mortgaged Property, or any pan thereof, or the possession thereof by any purchaser at any such sale, but
Grantor, insofar as Grantor now or hereafter ,nay lawfully do so, hereby waives the benefit of all such laws; provided, however, that the appraisement of any of the Mortgaged
Property is hereby expressly waived or not waived at the option of Trustee and/or Beneficiary, such option to be exercised prior to or at the time judgment is rendered in
any foreclosure of this Deed of Trust. Grantor expressly waives, to the extent Grantor may lawfully do so, all rights to have the Mortgaged ProPerty marshaled upon any
foreclosure of this Deed of Trust. In the event Grantor can not waive his right to redemption under applicable state law, including, but not limited to, Section ~19-5-19 New
Mexico Statutes and any amendments thereto, Grantor agrees to limit said redemption period to the shortest legal time, which in the case of New Mexico is one (1) month.
ARTICLE 4
.ASSIGNMENT OF PRODUCTION
Section 4.1 Additional Seenrity. To additionally secure the Obligation, Grantor has, effective as of 7 a.m., local time, on September 1. 2003 at the site of each
of the Subject Interests, ASSIGNED, TRANSFERRED AND CONVEYED, and does hereby ASSIGN, TRANSFER AND CONVEY, unto Beneficiary all of the
following:
WELLS FARGO BANK TEXAS, N.A.
6
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
243
(a) All hydrocarbons, and the proceeds therefrom and products obtained or processed therefrom (such proceeds and products being herein called "proceeds"),
produced and to be produced from the Mortgaged Property, and Grantor hereby authorizes and empowers Beneficiary to demand, collect and receive such hydrocarbons
and proceeds, to endorse and cash any checks and drafts payable to Grantor or Beneficiary for the account of Grantor received from or in connection with such hydrocarbons
and proceeds and to execute any release, receipt, division order, transfer order, and relinquishment or other instrument that may be required or necessary to collect and receive
such hydrocarbons and proceeds. Grantor hcreby authorizes and directs all pipeline companies, gathering companies, and others purchasing such hydrocarbons or having
in their possession any such hydrocarbons or proceeds, to pay and deliver to Beneficiary all such bydrocarbons and proceeds. Grantor agrees that all division ordersl transfer
orders, receipts and other instruments which Beneficiary may from thn¢ to time execute and deliver for the purpose of collecting or receipting For hydrocarbons or proceeds
may be relied upou in all respects and that the same shall be binding opon Grantor and Grantor's successors. Grantor agrees to execute and deliver all necessary, convenient
and appropriate instruments, including transfer and division orders, which may be required by Beneficiary in connection with the receipt by Beneficiary of such Itydrocarbons
or proceeds and to indemnify and keep and hold Beneficiary free and harmless from all parties whomsoever having or Claiming an adverse interest in such hydrocarbons
and proceeds and in this respect agrees to pay a 1 expenses, costs, charges and attorney's fees that may be incurred by BenefiCiary as to any such matters.
(b) All proceeds herea~er payable to or to become payable to Grantor or to which Grantor is entitled under all gas sales or exchange contracts, all oil, distillate,
or condensate Sales or exchange contracts, all gas transportation contracts, and all gas processing contracts now or hereafter to become a part of the Mortgaged Property.
(c) All amounts, sums, revenues, and income which become payable to Grantor from any of the Mortgaged Property (including any after-acquired properties)
or under any contract, present or future, relating to, any gas pipeline system and processing plant or unit now or hereafter constituting a part of thc Mortgaged Property.
(d) All lease bonus, delay rentals, royalties and shut-iu gas royalties which become payable to Grantor from any of the Mortgaged Property.
Section 4.2 Transfer Orders. Grantor agrees to execute socb transfer or&rs, payment orders, divisiou orders and other instruments as may be needed by
Beneficiary or requested byit incident to its having all assigned payrocnts made direct to it at its office in Midland, Texas. Grantor hereby authorizes and directs all such
pipeline companies, purchasers, transporters and other parties owing moneys to Grantor under contracts herein assigned, to pay such amounts direct to Beneficiary as follows:
WELLS FARGO BANK TEXAS, MIDLAND, N.A.
MAC T5717-011
500 W. Texas
P.O. Box 2097
Midland, Texas 79702-2097
and such authorization shall continue until this Deed of Trust is rele~ed. Beneficiary is authorized to collect, receive, and give receipt for all such amounts, and no party
making payment shall have any responsibility to see to the application of any fimds paid to the Beneficiary but shall be fully protected in making such payment to Beneficiary
under the assignments herein contained. Should Beneficiary bring suit against any third party for collection of any amounts or sums included within this assignment (and
Beneficiary shall have the right to bring any such suit), it may sue either in its own name or in the name of Grantor.
Section 4.3 .Payment of Proceeds. In the event that, for its convenience, Beneficiary should elect with respect to particular properties or contracts not to exercise
immediately its right Io receive hydrocarbons or proceeds, then the purchasers or other persons obligated to make such payment shall continue to make payment to Grantor
until such time as written demand has been made upon them by Beneficiary or Trustee that payment be made directly to Beneficiary. Such failure to notify shall not in
any way waive the right of Beneficiary to receive any payments not thcretofore paid out to Grantor before the giviug of written notice. In this regard, in thc event payments
are made directly to Beneficiary, and then, at the request of Beneficiary payments are, for a period of time, paid to Grantor, Beneficiary shall nevertheless have the right,
effective upon written notice, to require that future payments be again made to Beneficiary.
Section 4.4 Proceeds tteld in Trusl by Grantor. If under any existing gas sales or exchange agreements or products sales or exchange contracts, other than
division orders or transfer orders, or under any gas transportation contract, any proceeds arc required to be paid by the purchaser or transporter direct to Grantor so that under
such existing agreements payment cannot be made to Beneficiary in thc absence of foreclosure, than Grantor's interest in all proceeds under such sales agreement and in
all other proceeds which for any reason may be paid to Grantor shall, when received by Grantor, constitute trust funds in his hands and shall bc immediately paid over to
Beneficiary, if Beneficiary has requested that such payments bc delivered to it nndcr this assignment.
Section 4.5 Limitation of Liability of Beneficiary and Trustee: Beneficiary is hereby absolved from all liability for failure to enforce collection of thc proceeds
and amounts assigned under Section 4.1 above and from all other responsibility in connection therewith, except thc responsibility to account to thc person legally entitled
thereto (by application upon thc Obligation or otherwise) for funds actually received. Grantor agrees to indemnify and hold harmless Trustee and Beneficiary against any
and all liabilities, actioos, cia ns, judgments, costs, charges, and attorney's fees by reason of the assertion that they or either of them have recci~;ed, either before or after
payment and performance in lull of the Obligation, funds from tile production of hydrocarbons claimed by third persons, and thc Trustee and Beneficiary shall each have
tile right to compromise and adjust any such claims, actions, and judgments, and in addition to thc rights to be indemnified as herein provided, all amounts paid by Trustee
or by Beneficiary in compromise, satisfaction, or discharge of any such claim, action or judgment, and alt court costs, attorney's fees, and other expenses of every character
incurred by Trustee or by Beneficiary, pursuant to thc provisions of this section, sball be demand obligations owing by Grantor and shall bear interest at thc Highest Lawful
Rate froro date of expenditure until paid and shall be secured by the liens created and granted by this Deed of Trust.
Section 4.6 Rights Under New Mexico Act. Grantor hereby grants, sells, assigns, sets over and mortgages unto Beneficiary during thc term hereof, all of
Grantor's rights and interests pursuant to thc provisions of Sections 48-9-I, et seq., N.M.S.A. 1978 Comp. (thc "New Mexico Act"), hereby vesting in Beneficiary all of
Grantor's rights as an interest bwncr to the continuing security interest in and lien upon the Production. Bcnefic ar)' may, at its option, file thc verified notice of lien in order
to perfect such lien, but shall not be obligated to make such filing and shall not be held liable to Grantor for any act or mnission pursuant to thc New Mexico Act.
ARTICLE 5
MISCELLANEOU_ _ _ S
Section 5.1 .Release If thc Obligation is paid and performed in full in accordance with tile terms of this Deed of Tmst and thc Note and other security instruments
and documents and writings evidencing or securing all or any part of thc Obligation, and if Grantor shall well and truly perform all of Grantor's covenants contained herein,
then this conveyance shall bc released at Grantor's request and expense; otherwise, it shall remain in full force and effect, provided that no release hereof shall impair
Grantor's warranties and indenmities contained herein.
Section 5.2 Ri~bts Cumulative. All rights and liens herein expressly conferred are cunmlative Grail other rights and liens herein, or by law or in equity provided,
or provided in any other security instruments, and shall not be deemed to deprive Beneficiary or Trustee of any such other legal or equitable rights and liens by judicial
proceedings; or otherwise, appropriate to enforce the conditions, covenants and terms of this Deed of Trust and other security instruments, and the employment or
enforcement of any rights hereunder, or otherwise, shall not prevent the concurrent or subsequent employment or enforcement of any other rights.
Section 5.3 Waivers. Any and all covenants in this Deed of Trust may from time to time, by instrument in writing signed by Beneficiary and delivered to
Grantor, be waived to such extent and in such manner as Beneficiary may desire, but no such waiver shall ever affect or impair Beneficiary's rights and liens hereunder,
except to the extent specifically stated in such written instruments.
Section 5.4 Sale of Mortl!alled Prouertv. In tile event Grantor or an), of Grantor's successors conveys any interest in the mortgaged Property, or in any part
thereof, to an3' other party, Beneficiary may, without notice to Grantor or Granlor's successors, deal with any owner of any part Of the Mortgaged Property with reference
to this Deed of Trust and tile Obligation, either by way of forbearance on the part of Beneficiary, or extension of time of payment of the Obligation, or release of all or any
part of the Mortgaged Property, or any other property securing payment and performance of the Obligation, without in any way modifying or affecting Beneficiary's rights
and liens hereunder Or the liability of Grantor or any other party liable for payment and performance of the Obligation, in w lo e or in part; provided, that no action taken
or omitted to be taken by Beneficiary under this Section 5.4 shall be deemed a waiver of any default occurring by reason of any such conveyance.
Section 5.5 Condemnation Sale. Beneficiary shall be entitled to receive any and all sums which may be awarded or become payable to Grantor for the
condemnation of the Mortgaged Property, or any part thereof, for public or quasi-public use, or by virtue of private sale in lieu thereof, and any sums which may be awarded
or become payable to Grantor for duo, ages caused by public works or construction on or near the Mortgaged Property. All such sums are hereby assigned to Beneficiary,
and Grantor shall, upon request of Benefic ary, make, execute, acknowledge and deliver any and all additional assignments and documents as may be necessary from time
to time to enable Beneficiary to collect and receipt for any such sums. Beneficiary shall not be, under any circumstances, liable or responsible for failure to collect, or
exercise diligeuce in the collection of, any of such sums.
WELLS FARGO BANK TEXAS, N.A.
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
Section 5.6 Renewals of Obligation. It is understood and agreed that the proceeds of the Note or of any further loans or advances, to tile extent the same are
utilized to renew or extend any indebtedness or take up aoy outstanding liens against the Mortgaged Property, or any portion thereot~ have been advanced by Beneficiary
at Grantor's request and upon Grantor's representation that such anlounts are due ahd payable. Beneficiary shall be subrogaled to any and all rights and liens owned or
claimed by any owner or holder of such outstanding rights and liens, lowever remote regardless of whether such rigbts and liens are acquired by assignmant or are released
by tile holder thereof upon payment.
Section 5.7 Waiv.er 0f Marshalinp. Grantor hereby waives all rights of marshaling in the event of any foreclosure of the liens hereby created.
Section 5.8 Number and Gender of Words~ Etc. Whenever herein the singular number is used, the san~e shall include the plural where appropriate, and vice
versa, and words such as "herein," "lereof," "hereiuafier" and other words of similar import sball refer to this Deed of Trust and not to any particular section or portion
hereof, and words of any gender shall include each other gender where appropriate.
Section 5.9 Headings. The captions, headings, and arrangements used id this Deed of Trust are for convenience only and do not in any way affect, limit, amplify,
or modify tile terms and provisions hereof.
Section 5.10 Notices Whenever this Deed of Trust requires or permits any consent, approval, notice, request or demand from one party to another, the consent,
approval, notice, request, or demand must be in writing to be effective and sball be deemed to have been given on tile day personally delivered or, if mailed, oil the day it
is enclosed id an envelope, properly stamped, sealed and deposited in a post office or official depository maintained by the United States Postal Service, certified mail, return
receipt requested, addressed to the party to be notified at the address stated below (or at such other address as may have been designated by written notice):
If to Grantor: MR. DENNIS D. CORKRAN and
CORKIL4,N ENERGY, L.P.
2219 Westlake Drive, Suite 120
Austin, Texas 78746
Atto: Hummingbird Investments, L.L.C., General Parlner
Mr. Dennis Dwayne Corkran, Manager
Ms. Peggy Corkran, Manager
If tu Beneficiary: Wells Fargo Bank Texas, N.A.
MAC T5717-011
500 West Texas ;'i ~"
P.O. Box 2097 :
Midland, TX 79702-2097
ATTN: Mr. Gary Brednich, Senior Vice President
Section 5.11 Governine Law. This Deed of Trust is intended to be performed in the State of Texas, and the substantive laws of such state and of the United
States of America shall govern the validity, construction, enforcement, and interpretation of this Deed of Trnst. However, anything in this Deed of Trust to the contrary
notwithstanding, the substantive laws of the State of Texas ~elating to the validity, constrtiction and interpretation of the Obligatioq and to usury and permissible interest
and similar charges and amounts shall govern all aspects of this Deed of Trust.
Section' 5.12 Invalid Provisions. If any provision of this Deed of Trust is invalid or unenforceable in aqyjurisdiction applicable to this Deed of Trnst, then,
to the extent permitted by law,' (a) the other provisions hereof shall remain in full Ibrce and effect in such jurisdiction and shall be liberally construed in favor of Beneficiary
in order to carry out the intentions of the parties hereto as nearly may be possible; and (b) the invalidity or uneuforceability of such provision in any jurisdiction shall not
affect the validity or enforceability thereof in any other jurisdiction. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part
of the Obligation, the unsecured portion of the Obligation shall be completely paid prior to the payment of the remaining and secured portion of the Obligation, and all
payments made on the Obligation shall be coqsidered to have beeo paid on and applied first to the complete payment of the unsecured portion of the Obligation.
Section 5.13 Definitions. As used herein, the following terms shall have the meanings indicated:
"Advance Payment Contract" means any contract w th another person or party (thc "OIher Party") whereby Grantor either (i) reccivas or becomes entitled to
receive (either directly or to a third party for Grantor's account or benefit) any payment (an "Advance Payment") which the Other Party ,nay require to be applied toward
payment of the purchase price of hydrocarbons produced or to be produced from any of the Mortgaged Property and which Advance Payment is paid or to be paid in advance
of actual delivery of such production to or for the account of tile Other Party regardless of such production, or (ii) grants all option or right of refusal to such Other Party
to purchase and take delivery of such produclion, and, in either of the foregoing instances, regardless of whether the Advance Payment may be applied as payment for a
portion oniy of the purchase price thereof or ufa percentage or share of such production. Inclusion of the standard "lake or pay" provision in any gas sales or purchase
contract shall not, in and of itself, constitute such contract an "Advance Paymenl Contract" for the purposes hereof.
".Code" means the applicable Uniform Commercial Code, if any, of each state where any of the Mortgaged Property is situated.
"Collaleral" has the meaning given such term on page 2 hereof.
"Deed of Trust" has the meaning given such term in Article I hereof.
"Default" has the meaning given such term in Section 3.1 hereof.
"Grantor" means CORKRAN ENERGY, LPa Texas Limited Part ~ers tip (acting by and through its sole General Panner, Hummingbird Investments, EL.C, a Texas
Limited Liability Company) add DENNIS D. CORKRAN. '
"Grantor's Successors" means each and all of the immediate and remote successors, assigns, heirs, executor, administrators, and legal representatives of Grantor.
"Highest Lawful Rate" means the maximum rate of interest which Beneficiary is allowed fi*om thne to time tu contract for, charge, take, reserve, or receive under applicable
laws aller taking into account, to the extent required by applicable laws, any and all relevant payments or charges unde~ either note and, for purposes of such determination,
tile "Hiehest Lawful Rate" shall mean the greater of(a) the maximum rate of ioterest fi*om time to time permitted under the laws of the United States of America (including
without limilation tile rate ofinterast permitted to be cbarged under 12 U.S.C. §85), and (b) the maximum rate of interest permitted to be charged und~:r the laws of the State
of Texas.
".Holder" means any present or future holder of the Obligation or any part thereof.
".Hydrocarbons" has the meaning given such term in Paragraph III on page I hereof.
"Land" {las the meaning given such term in Paragraph VI on page 2 hereof.
"Laws" means all applicable constitution., treaties, ·statues, laws, ordinances, regulations, orders, writs, injunctions or decrees of the United States or of any state,
commonwealth, county, parish, municipality or tribunal.
".Lie, n" means any lien, mechanic's lien, materialman's lien, pledge, conditional sale agreement, lille retention agrccmcnt, financing lien, production payment, security interest,
mortgage, deed of trust or other encumbrance, whetber arising by agreement or under law.
".M, ortga~ed Property" has thc meaning given such term on page I hereof.
"Note" or "Notes" has the meaning given to such term in Section I. I hereof.
"Obligation" has the meaning given such term in Article I hereof.
WELLS FARGO BANK TEXAS, N.A.
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
"Permitted Liens" means all liens evidenced hereby or described or referred to in Exhibit "B" hereto. 2 4 5
"Persou" means any individual, firm, corporation, association, partnership, joint venture company, trust, tribunal or other entity.
"Personal Property" has tile meaning given such term in Paragraph V on pages I and 2 hereof.
"Proceeds" has the meaning given such term in Section 4. l(a) hereof.
"Rights" means rights, remedies, powers, and privileges.
"Sal.~..~c" has the meaning given Such term in Subsection 3.2(11) hereof.
"Section" means a section of this Deed of Trust, unless specifically indicated otherwise.
"Subicct Contracts" has thc meaning given such term in Paragraph IV.
"Subiect Easements" has thc meaning given such term in Paragraph V.
"Subiect Mterests" has the meaning given such term in Paragraph 1 and Il.
"Subiect Leases" bas the meaning given such term in Paragraph I.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties, deductions, withholdings or other similar charges from time to time or at any time imposed by any law
or any tribunal.
"Tribunal" means any court or any governmental department, commission, board, bureau, agency or instrumentality of the United States or of any state, commonwealth,
nation, territory, possession, county, parish or municipality, whether now or hereafter constituted and/or existing.
"Trustee" means thc person who is at the time the duly appointed trustee or successor or substitute trustee under this Deed of Trust at tile time in question.
Section 5.14 Form of Deed of Trust. This instrument may be construed and en forced from time to time whether within the State of Texas or as to lands situated
in New Mexico, and elsewhere outside the States of New Mexico and Texas, as a mortgage, deed of trust, chattel mortgage, conveyance, assignment, security agreement,
pledge, finmlcing statement, hypothecation or contract, or any one or more or them as may be appropriate under applicable laws, in order fully to effectuate the lien hereof
and the purposes and agreements herein set forth. |nsofar as this instrument is a security agreement, pledge, financing statement, hypothecation or contract, or any one or
more of them as may be appropriate under applicable laws, in order fi. dly to effectuate the lien hereof and the purposes and agreements herein set forth, Grantor is the debtor
and Beneficiary is the secured party. Tile addresses sho~vn in Section $.10 are tile addresses of the debtor and secured party and information concerning the security interest
granled hereby may be obtained from the secured party at such address. Without in any manner limiting the generality of any of the foregoing provisions hereof: la) some
portions of the goods described or to which reference is made herein are: or are to become fixtures on the Land described or to which reference is made herein; lb) the
minerals and tile like (including oil and gas) included in the Mortgaged Property and the accounts resulting from tile sate thereof will be financed at the wellhead(s) or
minehead(s) or the well(s) or mine(s) located on tile Land described or to which reference is made herein; and lc) this instrument is to be filed of record in the real estate
records in thc counties in which any portion of the Mortgaged Property is situated as a financing statement but the failure to do so will not otherwise affect the validity or
enforceability of this instroment.
Section 5.15 Restatenient of Prior Mortl!al~e. If Schedule I is attached hereto, thc Note described in Section 1.2 is given in renewal and extension of
indebtedness outstanding under the promissory notes described in and secured by the instruments set forth in Schedule I attached hereto and made a part hereof (as amended
and sopplemented to the date hereof, tile "Prior Mortgages"). It is the desire and intention of Grantor and Beneficiary to renew and extend all liens, rights, powers, privileges,
superior titles; estate and security interests existing by. virtne of tile 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 without interruption or lapse, but the terms, provisions, and condilions 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.
Section 5.16 Binding Effect. Tills Deed of Trust is binding upon Grantor and Grantor's successors and shall inure to thc benefit of Bcncflciary and their
respective successors and assigns, and thc provisions hereof shall likewise bc covenants nmning with the Land. Thc duties, covenants, conditions, obligations, and
warranties of Grantor in this Deed of Trust shall bc joint and several obligations of Grantor and Grantor's successors. Each and every party who signs this Deed of Trust,
other than Beneficiary, and each and every subsequent owner of the Mortgaged Property, or any part thereof, jointly and severally covenants and agrees that he or it will
perform, or cause to bc performed, each and every condition, tcn~, provision, and covenant of this Deed of Trust.
Executed this 20~h day of August, 2003.
CORKRAN ENERGY, L P
BY: tlUMMINGBIRD INVESTMENTS, LLC.
Dennis Dwayne Corkran, also known as
Dennis D. Corkran,
J¥1anager
Dennis Dwayne Corkran, a/k/a/
Dennis d. Corkran
GRANTOR
WELLS FARGO BANK TEXAS, MIDLAND, N. A.
T. Brednich, Senior Vice President
BENEFICIARY
WELLS FARGO BANK TEXAS, N.A.
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
THE STATE OF TEXAS §
COUNTY OF~ql~OO4t~ '7',~tV.~-d' §
This instrument was acknowledged before me on thc,,,~O day of August, 2003 by Dennis Dwayne Corkran, Mmfagcr of Hr mm ngb rd Investments, L.L.C.,
a Texas Limited Liability Company, acting in its capacity as sole General Partner of J;~orkran Energy, L.P., a Texas Limited Partnership, on behalf of said limited
partnershi p.~
THE STATE OF TEXAS §
COUNTY OF klll:lk,a.b~'7"~Vl.-J' § L"~___~ FEBRUARY 8,,20t~
This !nstrumem was acknowledged before me the~) day
on of AugusW;1003 by Dennis Dwayne Corkran as his act and deed
THE STATE OF TEXAS § ~ {~ I~:~a~ I~jl~:. 8tale o~ Texas
COUNTY OF MIDLAND §
This instrument was acknowledged before me on t ]~ay of August, 2003 by Gary T. Brednich, Senior Vice President of WELLS FARGO BANK
N'"~ta~ublic, State of Texas
~l~w..'i State et Texas
',,?~ ...... '¢+..V _ _
WELLS FARGO BANK TEXAs, N.A.
;LO
DEED OF TRUST, MORTGAGE,
ASSIGNMENT OF PRODUCTION
247
EXHIBIT "A" TO
DEED OF TRUST, MORTGAGE, ASSIGNMENT, SECURITY
AGREEMENT AND FINANCING STATEMENT, DATEDiAUGUST 20, 2003
FROM CORKRAN ENERGY, LP AND DENNIS D.CORKRAN
TO RON MULLINS, TRUSTEE
FOR WELLS FARGO BANK TEXAS, N.A.
This Exhibit "A" contains a description of Grantors'/Mortgagors' interest which may consist of producing and non-producing
oil and gas leases, oil, gas and mineral interests, oil and gas royalty interests, and oil and gas overriding royalty interests affecting lands
situated in LincolnCounty~iWyoming which is intended to be made subject to the Deed of Trust/Mortgage Lien therein. Reference is
hereby made to each particular instrument described and referred to in this Exhibit "A" for further description and for all the terms and
conditions thereof and the lands covered thereby.
This Deed of Trust/Mortgage may be executed in multiple counterparts, each of which is an original and all of which are '
substantially identical and shall together constitute but one and the same Deed of Trust/Mortgage.
It is the intention of the Grantors herein to convey or mortgage all oil and gas properties of whatsoever nature that either Grantor
owns, including all of its interests in the Lincoln County lands, even though any such oil and gas property is not accurately described
herein.
"Working Interest" or "WI" (expressed as a decimal) shall mean the interest of a Grantor in any particular Oil and Gas Lease,
well, or unit as the case may be, entitling the Grantor to produce oil, gas and other hydrocarbons produced therefrom and being equivalent
to the proportionate part of the cost of exploration, development and production of oil, gas and other minerals borne by the owners thereof
with respect to such Oil and Gas Lease or well.
"Net Revenue Interest" or "NRA" (expressed as a decimal) means the warranted interest of a Grantor representing the
proportionate share of the production of oil, gas and other hydrocarbons produced from an Oil and Gas Lease or well as the case may be,
to which the Grantor is entitled after deduction of all royalties, overriding royalty interests, production payments and other burdens on
or payments out of production.
"Overriding Royalty Interest" or "ORA" (expressed as a decimal) means the interest in the applicable hydrocarbons produced,
saved and sold fi'om a particular Oil and Gas Lease, well or unit, as the case may be, which is afforded to Grantor by virtue of his
ownership of such expense-free interest in the oil, gas and mineral lease, well or unit.
Notwithstanding the percentage of Working Interest, Net Revenue Interest or Overriding Royalty Interest set forth with respect
to a particular oil, gas and mineral lease or well, Grantors intend that this Deed of Trust shall convey or mortgage the entirety of their
interest in any Oil and Gas Leases affecting the Lands in this county.
Lincoln County, Wyominv
Fontenelle Unit and Font Fed Wells
All of Grantor's right, title and interest in and to the following described oil and gas lease insofar as said lease covers the lands
described:
Lessor:
Lessee:
Date:
Recorded:
Lands:
United States of America - Serial No. W 38501
February 28, 1983
Township 25 North, Range 111 West, 6'h P.M.
Section 6: Lots 6, 7, E/2 SW/4, SE/4
Section 7: Lots 3, 4, E/SW/4, SE/4
Section 5:W/2
All in Lincoln County, Wyoming
WELLS FARGO BANK TEXAS, N.A.
DEED OF TRUST, MORIOAGE,
ASSIONMENI OF PRODUCIIOI~