EXHIBIT 10.27.1
MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION
(THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS)
FROM
PRIME OFFSHORE L.L.C.
(fka F-W Oil Exploration L.L.C.)
Taxpayer Identification Number: 76-0688905
(Mortgagor and Debtor)
TO
Arthur R. Gralla, Jr., Trustee
for the benefit of
GUARANTY BANK, FSB, Agent
(Mortgagee and Secured Party)
Effective June 29, 2006
For purposes of filing this Deed of Trust as a financing statement, the mailing
address of Mortgagor is 9821 Katy Freeway, Suite 1050, Houston, Texas 77024; the
mailing address of Mortgagee is 333 Clay Street, Suite 4400, Houston, Texas
77002-4103.
v   v   v   v   v   v    v   v   v    v   v   v   v    v   v   v   v
This instrument, prepared by R. H. Walls, Jackson Walker L.L.P., 1401 McKinney,
Suite 1900, Houston, Texas 77010, 713-752-4200, contains after-acquired property
provisions and covers future advances and proceeds to the fullest extent allowed
by applicable law.
ATTENTION OF RECORDING OFFICER: This instrument is a mortgage of both real and
personal property and is, among other things, a Security Agreement and Financing
Statement under the Uniform Commercial Code. This instrument creates a lien on
rights in or relating to lands of Mortgagor which are described in Exhibit A
hereto or in documents described in Exhibit A.
RECORDED DOCUMENT SHOULD BE RETURNED TO:
JACKSON WALKER L.L.P.
1401 McKinney, Suite 1900
Houston, Texas 77010
Attn.: Jessica Johnson

 

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MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION
(THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS)
          This Mortgage, Deed of Trust, Security Agreement, Financing Statement,
and Assignment of Production (this “Deed of Trust”) is executed pursuant to the
Credit Agreement dated as of as of June 29, 2006, by and among Prime offshore
L.L.C. (fka F-W Oil Exploration L.L.C.), a Delaware limited liability company,
as Borrower (herein, “Mortgagor”), and Guaranty Bank, FSB, a federal savings
bank, individually as a Lender and as Agent for the lenders signatory thereto
from time to time (the “Lenders”) (as amended, restated, or supplemented from
time to time, the “Credit Agreement”). Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
          Mortgagor, acting herein by and through its proper officers who have
heretofore been duly authorized, whose mailing address is 9821 Katy Freeway,
Suite 1050, Houston, Texas 77024, hereby agrees as follows:
ARTICLE 1
GRANT
          1.1 Lien. Mortgagor, for valuable consideration, the receipt of which
is hereby acknowledged, and in consideration of the debt and trust hereinafter
mentioned, has granted, bargained, sold, conveyed, transferred and assigned, and
by these presents does grant, bargain, sell, convey, transfer and assign to
Arthur R. Gralla, Jr., Trustee, whose address is c/o Guaranty Bank, FSB, 333
Clay Street, Suite 4400, Houston, Texas 77002-4103, and his successors and
substitutes in trust, as hereinafter provided (the “Trustee”), for the benefit
of Guaranty Bank, FSB, as Agent for the lenders, with banking quarters in
Houston, Harris County, Texas, the mailing address for which is 333 Clay Street,
Suite 4400, Houston, Texas 77002-4103 (herein “Mortgagee”), the following
described Property:
     (a) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in and to the leases, rights of way,
easements, or other documents described in Exhibit A, attached hereto and
incorporated herein for all purposes or described or referred to in the
documents described in Exhibit A, without regard to any surface acreage and/or
depth limitations set forth in Exhibit A, and all renewals and extensions
thereof and all new leases, rights of way, easements, or other documents (i) in
which an interest is acquired by Mortgagor after the termination or expiration
of any lease, right of way, easement, or other document described or referred to
in Exhibit A, and (ii) that covers all or any part of the Property described in
and covered by such terminated or expired lease, right of way, easement, or
other document, to the extent, and only to the extent, such new leases, rights
of way, easements, or other documents may cover such Property (all of the
foregoing in this subsection (a) being the “Leases”);

 

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     (b) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in and to the lands subject to the
Leases or otherwise described or referred to in Exhibit A, without regard to any
surface acreage and/or depth limitations set forth in Exhibit A (the “Lands”),
including, without limitation, the oil, gas, mineral, and leasehold estates in
and to the Lands;
     (c) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in and to any of the oil, gas, and
minerals in, on, or under the Lands, including, without limitation, all
contractual rights, fee interests, leasehold interests, overriding royalty
interests, non-participating royalty interests, mineral interests, production
payments, net profits interests, or any other interest measured by or payable
out of production of oil, gas, or other minerals from the Leases and/or Lands;
     (d) all of the foregoing interests of Mortgagor as such interests may be
enlarged by the discharge of any payments out of production or by the removal of
any charges or encumbrances;
     (e) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in, to, and under or derived from
any present or future operating, farmout, bidding, pooling, unitization, and
communitization agreements, assignments, and subleases, whether or not described
in Exhibit A, to the extent, and only to the extent, that such agreements,
assignments, and subleases cover or include any right, title, and interest,
whether now owned and existing or hereafter acquired or arising, of Mortgagor in
and to all or any portion of the Leases and/or the Lands, and all units created
by any such pooling, unitization, and communitization agreements and all units
formed under orders, regulations, rules, or other official acts of any
Governmental Authority having jurisdiction, to the extent and only to the extent
that such units cover or include all or any portion of the Leases and/or the
Lands;
     (f) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in, to, and under or derived from
all presently existing and future advance payment agreements, oil, casinghead
gas, and gas sales, exchange, and processing contracts and agreements,
including, without limitation, those contracts and agreements that are described
or referred to in Exhibit A, to the extent, and only to the extent, those
contracts and agreements cover or include all or any portion of the Leases
and/or the Lands; and
     (g) all right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in, to, and under or derived from
all existing and future permits, licenses, easements, and similar rights and
privileges that relate to or are appurtenant to any of the Leases and/or the
Lands.
          1.2 Security Interest. Mortgagor, for the same consideration, hereby
grants to Mortgagee a continuing security interest in all improvements and all
personal Property of any kind or character defined in and subject to the
provisions of the Uniform Commercial Code (“UCC”),

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including, but not limited to, substitutions and replacements for, accessions
to, and the proceeds and products from any and all of such improvements and
personal Property, as well as any and all “as-extracted collateral” as such term
is defined in the UCC, whether now owned and existing or hereafter acquired or
arising, and situated on any of the Lands, including, but not limited to, pipe,
casing, tubing, rods, storage tanks, boilers, loading racks, pumps, foundations,
warehouses, and all other personal Property and equipment of every kind and
character upon, incident, appurtenant, or belonging to and used in connection
with the interest of Mortgagor, whether now owned and existing or hereafter
acquired or arising, in the Lands and/or the Leases, including all oil, gas, and
other minerals produced or to be produced to the account of Mortgagor from the
Lands and all accounts receivable, general intangibles, and contract rights of
Mortgagor in connection with the Lands and/or the Leases and all proceeds,
products, substitutions, and exchanges thereof (the Lands, the Leases, and the
real and personal Property interests described in this Section being the
“Mortgaged Property”).
          1.3 Assignment of Security. Mortgagor, for the same consideration,
hereby grants to Mortgagee any and all rights of Mortgagor to Liens securing
payment of proceeds from the sale of production from the Mortgaged Property.
          1.4 After-Acquired Property. Mortgagor, for the same consideration,
hereby grants, bargains, sells, conveys, transfers, and assigns to the Trustee
or grants to Mortgagee a continuing security interest in, as the case may be,
all additional right, title, or interest which Mortgagor may hereafter acquire
or become entitled to in the interests, Properties, Lands, Leases, and premises
aforesaid, and in the oil, gas, or other minerals in and under or produced from
or attributable to any of the Lands or Leases, which additional right, title,
and interest, when acquired, shall constitute “Mortgaged Property,” the same as
if expressly described and conveyed herein.
          1.5 Habendum. TO HAVE AND TO HOLD all and singular the Mortgaged
Property and all other Property which, by the terms hereof, has or may hereafter
become subject to the Liens of this Deed of Trust, together with all rights,
hereditaments, and appurtenances in anywise belonging thereto, to the Trustee or
Mortgagee, as the case may be, or the successors or assigns of either of them
forever.
ARTICLE 2
INDEBTEDNESS SECURED
          This conveyance is made, IN TRUST, HOWEVER, to secure and enforce the
payment of the following indebtedness, obligations, and liabilities:
          2.1 Specific Obligations. The Obligations, including, without
limitation, the indebtedness evidenced by (a) the Credit Agreement, and (b) the
Promissory Note dated June 29, 2006, executed by Mortgagor to the order of the
Lenders pursuant to the Credit Agreement in the aggregate face amount of up to
$200,000,000, bearing interest and being payable as provided therein or as
provided in the Credit Agreement.
          2.2 Additional Indebtedness.

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     (a) Payment of and performance of any and all present or future obligations
of Mortgagor under Commodity Hedge Agreements, as defined in the Credit
Agreement.
     (b) Payment of and performance of any and all present or future obligations
of Mortgagor under any Rate Management Transaction, as defined in the Credit
Agreement, entered into by and between Mortgagor and a Lender.
     (c) Payment of and performance of any and all present or future obligations
of Mortgagor under any guaranty in favor of Lenders of any of the Mortgagor’s
subsidiary’s obligations under Commodity Hedge Agreements and Rate Management
Transactions and all present or future obligations of Mortgagor or Mortgagor’s
subsidiaries under Commodity Hedge Agreements and Rate Management Transactions.
          2.3 Other and Further Indebtedness. This Deed of Trust is intended to
secure a revolving credit line as set forth in the Credit Agreement. If
intermediate paydowns by Mortgagor reduce the outstanding Indebtedness to zero,
it is intended that the Liens created under this Deed of Trust shall remain in
full force and effect as long as any Commitment exists. In addition, it is
contemplated that Mortgagor may from time to time borrow additional sums of
money from or otherwise be or become obligated to Lenders. This Deed of Trust is
given to secure any and all indebtedness of Mortgagor, present or future, either
direct or indirect, primary or secondary, fixed or contingent, which Mortgagor
may now or hereafter owe, or as to which Mortgagor may in any manner become
obligated to Lenders for payment, including, without limitation, indebtedness
arising by way of guaranty as to obligations of another to Lenders and
indebtedness originally owed to a party other than Lenders but which becomes
owing to Lenders as the result of Lenders having acquired the right to payment
thereof. This Deed of Trust shall likewise secure not only the above described
indebtedness, but any and all renewals for any period, extensions, and
rearrangements of all or any portion thereof; and the Liens under this Deed of
Trust shall be cumulative of all other Liens and security of any and every other
kind or character whatsoever securing the above-described indebtedness.
Notwithstanding the foregoing, it is not the intention of the parties hereto to
extend the Liens of this Deed of Trust so as to violate, or give rise to an
allegation of violation of, any provision of any statute, regulation, rule,
ordinance or order of any applicable jurisdiction, or any agency or subdivision
of any of such jurisdictions. In this connection, this Deed of Trust shall not,
solely as to the relevant indebtedness, serve as security for any indebtedness
when for it to do so would violate any provision of any statute, regulation,
rule, ordinance or order of any applicable jurisdiction, or any agency or
subdivision of any of such jurisdictions.
          2.4 Indebtedness. The word “Indebtedness” wherever used in this Deed
of Trust shall refer to all present and future debts, obligations, and
liabilities described or referred to in this Article 2, subject, however, to the
limitations provided hereinabove in this Article 2.

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ARTICLE 3
WARRANTIES
          3.1 Warranty of Title. Mortgagor hereby binds itself, its legal
representatives, successors, and assigns, to warrant and forever defend all and
singular the Mortgaged Property to the Trustee and the successors and assigns of
the Trustee forever against every Person whomsoever lawfully claiming or to
claim the same or any part thereof. Notwithstanding that this Deed of Trust
covers all of the right, title, and interest, whether now owned and existing or
hereafter acquired or arising, of Mortgagor in and to the Mortgaged Property,
Mortgagor, for itself, its legal representatives, successors, and assigns,
further covenants, represents, and warrants that Mortgagor has good and
indefeasible title to the Mortgaged Property and that the interests of Mortgagor
in and to the Leases and/or Lands described in Exhibit A are not greater than
the working interest nor less than the net revenue interest, overriding royalty
interest, net profit interest, production payment interest, royalty interest, or
other interest payable out of or measured by production set forth in connection
with each oil and gas well described in Exhibit A. In the event Mortgagor owns
any other or greater interest, such additional interest is nonetheless included
in, covered by, and subject to the liens and security interests created by this
Deed of Trust.
          3.2 Additional Warranties. In consideration of the Indebtedness,
Mortgagor, for itself, its legal representatives, successors, and assigns,
covenants, represents, and warrants that:
     (a) Leases in Effect. All of the Leases specifically described or referred
to in Exhibit A, are in full force and effect. All covenants, express or
implied, in respect of the Leases specifically described or referred to in
Exhibit A, or of any assignment of any of such Leases, which may affect the
validity of any of such Leases, have been performed insofar as such Leases
pertain to the Lands.
     (b) Interests Free of Liens. The interests of Mortgagor in the Mortgaged
Property are free and clear of all Liens except for Permitted Liens. All gross
production taxes and all taxes as to which non-payment could result in a Lien
against any of the Mortgaged Property have been paid.
     (c) Representations and Warranties. As of the date hereof, all
representations and warranties of Mortgagor set forth in the Credit Agreement
are true and correct in all material respects, except to the extent such
representations and warranties relate solely to an earlier date, and all such
representations and warranties are hereby remade by Mortgagor to Mortgagee.

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ARTICLE 4
COVENANTS OF MORTGAGOR
          In consideration of the Indebtedness, Mortgagor, for itself, its legal
representatives, successors, and assigns, covenants and agrees as follows:
          4.1 Maintenance of Leases. Mortgagor will keep and continue all
Leases, estates, and interests herein described and all contracts and agreements
relating thereto in full force and effect in accordance with the terms thereof
and will not permit the same to lapse or otherwise become impaired for failure
to comply with the obligations thereof, whether express or implied, In this
connection, Mortgagor shall not release any of the Leases without the prior
written consent of Mortgagee.
          4.2 Maintenance of Property. Mortgagor will keep and maintain all
improvements, personal Property, and equipment now or hereafter situated on the
Lands and constituting a portion of the Mortgaged Property and used or obtained
in connection therewith in good repair and condition, ordinary wear and tear
excepted, and will not tear down or remove the same or permit the same to be
torn down or removed without the prior consent of Mortgagee, except in the usual
course of operations as may be required for replacement when otherwise in
compliance with the provisions of this Deed of Trust and the Credit Agreement.
          4.3 Pooling or Unitization. Mortgagor will not, without the prior
written consent of Mortgagee, pool or unitize all or any part of the Mortgaged
Property where the pooling or unitization would result in the diminution of the
net revenue interest of Mortgagor in production from the pooled or unitized
lands attributable to the Mortgaged Property constituting a portion of such
pooled or unitized lands. Immediately after the formation of any pool or unit in
accordance herewith, Mortgagor will furnish to Mortgagee a conformed copy of the
pooling agreement, declaration of pooling, or other instrument creating the pool
or unit. The interest of Mortgagor included in any pool or unit attributable to
the Mortgaged Property or any part thereof shall become a part of the Mortgaged
Property and shall be subject to the Liens hereof in the same manner and with
the same effect as though the pool or unit and the interest of Mortgagor therein
were specifically described in Exhibit A. In the event any proceedings of any
Governmental Authority which could result in pooling or unitizing all or any
part of the Mortgaged Property are commenced, Mortgagor shall give immediate
written notice thereof to Mortgagee. Any pooling or unitization of all or any
part of the Mortgaged Property in violation of this Section shall be of no force
or effect against the Trustee or Mortgagee.
          4.4 Operation of Mortgaged Property. Mortgagor will operate or, to the
extent that the right of operation is vested in others, will exercise its best
efforts to require the operator to operate the Mortgaged Property and all wells
now or hereafter located thereon continuously and in a prudent and workmanlike
manner in accordance with the best usage of the field and in accordance with all
applicable Requirements of Law. Mortgagor will comply with all terms and
conditions of the Leases and each assignment or contract obligating Mortgagor in
any way with respect to the Mortgaged Property; but nothing herein shall be
construed to empower Mortgagor to bind the Trustee or Mortgagee to any contract
or obligation or render the Trustee or Mortgagee in any way responsible or
liable for bills or obligations incurred by Mortgagor.

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          4.5 Compliance with Operating Agreements. Mortgagor agrees to promptly
pay all bills for labor and materials incurred in the operation of the Mortgaged
Property and will promptly pay its share of all costs and expenses incurred
under any joint operating agreement affecting the Mortgaged Property or any
portion thereof; will furnish Mortgagee, as and when requested, full information
as to the status of any joint account maintained with others under any such
operating agreement; will not take any action to incur any liability or Lien
thereunder; and will not enter into any new operating agreement or any amendment
of any existing operating agreement affecting the Mortgaged Property without the
prior written consent of Mortgagee. Furthermore, Mortgagor will not consent or
agree to participate in any proposed operation under any presently existing
operating agreement affecting the Mortgaged Property unless Mortgagor obtains
the prior written consent of Mortgagee and, if requested by Mortgagee, deposits
with the operator or Mortgagee, where Mortgagor is a non-operator, or with
Mortgagee, where Mortgagor is an operator, Mortgagor’s share of the estimated
cost of the proposed operation prior to electing to participate in the
operation. To the extent that Mortgagor is unable to consent to any proposed
operation with respect to any of the Mortgaged Property, prior to electing not
to participate in the proposed operation, Mortgagor will use its best efforts,
to the extent practicable and to the extent allowed to do so under the relevant
operating agreement or other applicable contract, to farmout to others
acceptable to Mortgagee, on the best terms obtainable and acceptable to
Mortgagee, the interest or relevant portion of the interest of Mortgagor in the
proposed operation.
          4.6 Access to Mortgaged Property. Mortgagor will permit Mortgagee and
its accredited agents, representatives, attorneys and employees, at the expense
of Mortgagor, at all times to go upon, examine, inspect, conduct environmental
audits and other testing of, and remain on, the Mortgaged Property, and to go
upon the derrick floor of any well at any time drilled or being drilled thereon,
and will furnish Mortgagee, upon request, all pertinent information regarding
the development and operation of the Mortgaged Property.
          4.7 Waivers. Mortgagor hereby expressly waives, to the full extent
permitted by applicable law, any and all rights or privileges of marshalling of
assets, sale in inverse order of alienation, notices, appraisements, redemption,
and any prerequisite in the event of foreclosure of the Liens created herein.
Mortgagee at all times shall have the right to release any part of the Mortgaged
Property now or hereafter subject to the Liens of this Deed of Trust, any part
of the proceeds of production or other income herein or hereafter assigned or
pledged, or any other security it now has or may hereafter have securing the
Indebtedness, without releasing any other part of the Mortgaged Property,
proceeds, or income, and without affecting the Liens hereof as to the part or
parts of the Mortgaged Property, proceeds, or income not so released or the
right to receive future proceeds and income.
          4.8 Compliance with Laws. Mortgagor will comply with all Requirements
of Law applicable to the Mortgaged Property and the operations conducted
thereon, including, without limitation, the Natural Gas Policy Act of 1978, as
amended, and Environmental Laws; and cause all employees, crew members, agents,
contractors, sub-contractors, and future lessees (pursuant to appropriate lease
provisions) of Mortgagor, while such Persons are acting within the scope of
their relationship with Mortgagor, to comply with all such Requirements of Law
as may be necessary or appropriate to enable Mortgagor to so comply.

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          4.9 Hazardous Substances Indemnification. Mortgagor hereby indemnifies
and holds mortgagee and the lenders and their respective shareholders, officers,
directors, employees, agents, attorneys-in-fact, and affiliates and the trustee
harmless from and against any and all claims, losses, damages, liabilities,
fines, penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial actions, requirements and enforcement actions of any kind,
and all costs and expenses incurred in connection therewith (including, without
limitation, attorneys’ fees and expenses), arising directly or indirectly, in
whole or in part, from (a) the presence of any hazardous substances on, under,
or from any mortgaged property, whether prior to or during the term hereof,
(b) any activity carried on or undertaken on or off any mortgaged property,
whether prior to or during the term hereof, and whether by mortgagor or any
predecessor in title, employee, agent, contractor, or subcontractor of mortgagor
or any other person at any time occupying or present on any mortgaged property,
in connection with the handling, treatment, removal, storage, decontamination,
cleanup, transportation, or disposal of any hazardous substances at any time
located or present on or under such property, (c) any residual contamination on
or under any mortgaged property, (d) any contamination of any mortgaged property
or natural resources arising in connection with the generation, use, handling,
storage, transportation, or disposal of any hazardous substance by mortgagor or
any employee, agent, contractor, or subcontractor of mortgagor while such
persons are acting within the scope of their relationship with mortgagor,
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable requirements of law, or (e) the performance and
enforcement of this deed of trust or any other act or omission in connection
with or related to this deed of trust or the transactions contemplated hereby,
including, without limitation, any of the foregoing in this section arising from
negligence, whether sole or concurrent, on the part of mortgagee or any lender
or any of their respective shareholders, officers, directors, employees, agents,
attorneys-in-fact, or affiliates or the trustee; with the foregoing indemnity
surviving satisfaction of the indebtedness, the termination of the credit
agreement, and the release of the liens created hereby.
          4.10 Site Assessments. Mortgagee (by its officers, employees and
agents) at any time and from time to time, either prior to or after the
occurrence of an Event of Default, may contract, at the expense of Mortgagor,
for the services of Persons (the “Site Reviewers”) to perform environmental site
assessments and other tests (“Site Assessments”) on all or any portion of the
Mortgaged Property for the purpose of determining whether any environmental
condition exists on any Mortgaged Property which could reasonably be expected to
result in any liability, cost, or expense to Mortgagee or any owner, occupier,
or operator of such Mortgaged Property. The Site Assessments may be performed at
any time or times, upon reasonable notice, and under reasonable conditions
established by Mortgagor which do not impede the performance of the Site
Assessments. The Site Reviewers are hereby authorized to enter upon all or any
portion of the Mortgaged Property for such purposes. The Site Reviewers are
further authorized to perform both above and below the ground testing for
environmental damage or the presence of Hazardous Substances on the Mortgaged
Property and such other tests on the Mortgaged Property as may be necessary to
conduct the Site

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Assessments in the reasonable opinion of the Site Reviewers. Mortgagor will
supply to the Site Reviewers such historical and operational information
regarding the Mortgaged Property as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments and will make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. On request, Mortgagee shall make the results of such Site Assessments
available to Mortgagor, which, prior to an Event of Default, may at its election
participate under reasonable procedures in the direction of such Site
Assessments and the description of tasks of the Site Reviewers. The cost of
performing all Site Assessments shall be paid by Mortgagor upon demand of
Mortgagee and any such obligations shall be Indebtedness secured by this Deed of
Trust.
          4.11 Uneconomic Wells. Should proceeds from the sale of production
from any oil and/or gas well constituting part of the Mortgaged Property (net of
production, severance and windfall profit taxes and royalties, overriding
royalties and other payments out of or measured by production) not exceed the
expense of operation of such well (including, but not limited to, operator’s
overhead, payments to contractors and suppliers, and annual taxes assessed on
the basis of the value of the Property prorated on a monthly basis, but
expressly excluding any portion of the cost of drilling or completing the
relevant well or the cost of non-routine workover or remedial operations) for a
period in excess of three consecutive calendar months, then, upon receipt by
Mortgagor of written notification from Mortgagee, Mortgagor will (a) take all
necessary steps to abandon the relevant well, or (b) provide from sources other
than proceeds from the sale of production attributable to the Mortgaged Property
(i.e., through borrowings or contractual commitments obtained from third parties
not in violation of any provision of this Deed of Trust or any other Loan
Document) the funds required to pay the share of Mortgagor of the expenses
associated with the continuing operation of such well.
          4.12 Performance of Gas Contracts. Mortgagor will perform and observe
in all material respects all of its obligations under each contract relating to
the sale of gas produced from or attributable to the Mortgaged Property and will
not, except in good faith and as the result of arm’s length negotiations and
with prior written notice to Mortgagee, change, modify, amend or waive any of
the terms or provisions of any such contract or take any other action which
would release any other party from its obligations or liabilities under any such
contract.
          4.13 Covenants Running with the Land. All covenants and agreements
herein contained shall constitute covenants running with the Land.

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ARTICLE 5
DEFEASANCE, FORECLOSURE
AND OTHER REMEDIES
          5.1 Defeasance. Should the Indebtedness be paid, then the conveyance
of the Mortgaged Property shall become of no further force and effect, and, at
the request and expense of Mortgagor, the Lien granted hereunder shall be
released, without recourse or warranty; otherwise, it shall remain in full force
and effect.
          5.2 Events of Default. The occurrence of any Event of Default under
the Credit Agreement shall constitute an Event of Default under this Deed of
Trust.
          5.3 Acceleration and Exercise of Power of Sale.
     (a) Upon the occurrence of an Event of Default specified in Sections 7.1(f)
or 7.1(g) of the Credit Agreement, the aggregate principal amount of all
Indebtedness then outstanding and all interest accrued thereon shall
automatically become immediately due and payable, without presentment, demand,
protest, notice of protest, default or dishonor, notice of intent to accelerate
maturity, notice of acceleration of maturity, or other notice of any kind, all
of which are hereby expressly waived by Mortgagor to the full extent permitted
by applicable law. Upon the occurrence of any other Event of Default, Mortgagee
may declare the aggregate principal amount of all Indebtedness then outstanding
and all interest accrued thereon immediately due and payable, whereupon the same
shall become immediately due and payable without presentment, demand, protest,
notice of protest, default or dishonor, notice of intent to accelerate maturity,
notice of acceleration of maturity, or other notice of any kind, all of which
are hereby expressly waived by Mortgagor to the full extent permitted by
applicable law.
     (b) Upon the occurrence of any Event of Default or at any time thereafter
while the Indebtedness or any part thereof remains unpaid, it shall be the duty
of the Trustee, on request of Mortgagee (which request is hereby presumed), to
enforce this Trust and, after advertising the time and place of the sale for at
least 21 days prior to the day of sale, by posting or causing to be posted a
written or printed notice thereof at the courthouse door and by filing a copy of
such notice in the office of the county clerk of each county in which the
Mortgaged Property or any part thereof may be situated, and serving written
notice of the proposed sale on each debtor obligated to pay the Indebtedness
according to the records of Mortgagee, by postage prepaid, certified United
States mail, at the most recent address for such debtor as shown by the records
of Mortgagee, at least 21 days prior to the day of sale, to sell the Mortgaged
Property, either as a whole or in parcels, as the Trustee may deem proper, at
public venue at the courthouse of the county in which the Mortgaged Property or
any part thereof may be situated (and being the county designated in the notice
of sale) on the first Tuesday of any month between the hours of 10:00 a.m. and
4:00 p.m., to the highest bidder for cash, and after such sale to execute and
deliver to the purchaser or purchasers good and sufficient deeds and
assignments, conveying

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such Property so sold to the purchaser or purchasers with general warranty of
title made on behalf of Mortgagor. The Trustee, or his successor or substitute,
is hereby authorized and empowered to appoint any one or more Persons as his
attorneys-in-fact or agents to act as Trustee under him and in his name, place
and stead, such appointment to be evidenced by a written instrument executed by
the Trustee, or his successor or substitute, to perform any one or more act or
acts necessary or incident to any sale under the power of sale hereunder,
including, without limitation, the posting and filing of any notices, the
conduct of the sale and the execution and delivery of any instruments conveying
the Mortgaged Property as a result of the sale, but in the name and on behalf of
the Trustee, or his successor or substitute; and all acts done or performed by
such attorneys-in-fact or agents shall be valid, lawful and binding as if done
or performed by the Trustee, or his successor or substitute. No single sale or
series of sales by the Trustee shall extinguish the Lien or exhaust the power of
sale hereunder except with respect to the items of Property sold, but such Lien
and power shall exist for so long as and may be exercised in any manner by law
or as herein provided as often as the circumstances require to give Mortgagee
full relief hereunder. The purchaser at any such sale shall not assume, nor
shall the heirs, legal representatives, successors or assigns of such purchaser,
be deemed to have assumed, by reason of the acquisition of Property or rights
mortgaged hereunder, any liability or obligation of any lessee or operator of
the Mortgaged Property, or any part thereof, arising by reason of any occurrence
taking place prior to such sale. It shall not be necessary to have present, or
to exhibit at any such sale, any of the personal Property subject to the Lien
hereof.
          5.4 Rights as Secured Party. Upon the occurrence of any Event of
Default, Mortgagee shall be entitled to all of the rights, powers, and remedies
afforded a secured party by the UCC with respect to the personal Property and
fixtures and as-extracted collateral in which Mortgagee has been granted a
security interest hereby, or Mortgagee may proceed in accordance with the
provisions hereof as to both the real and personal Property covered hereby.
          5.5 Application of Proceeds of Sale. The Trustee is authorized to
receive the proceeds of each sale of Mortgaged Property and apply the same as
follows:
FIRST: to the payment of all necessary costs and expenses incident to the
execution of this Deed of Trust, including, but not limited to, a fee to the
Trustee of 5% of the amount realized at the sale, if required by the Trustee;
SECOND: to any and all Indebtedness then hereby secured, application to be made
in such order and in such manner as Mortgagee may, in its discretion, elect;
THIRD: the balance, if any, to Mortgagor or its successors or assigns, or other
Person legally entitled thereto.
          5.6 Substitute Trustee. In the event of the death of the Trustee, or
his removal from the State of Texas, or his failure, refusal, or inability for
any reason to make any such sale or to

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perform any of the trusts herein declared, or at any time, whether with or
without cause, Mortgagee may appoint, in writing, a substitute trustee who shall
thereupon succeed to all the estates, rights, powers, and trusts herein granted
to and vested in the Trustee. In the same events as first above stated, and in
the same manner, successive substitute Trustees may thereafter be appointed.
          5.7 Statements by Trustee. It is agreed that in any deed or deeds
given by any Trustee any and all statements of fact or other recitals therein
made as to the identity of the holder or holders of the Indebtedness, or as to
default in the payments thereof or any part thereof, or as to the breach of any
covenants herein contained, or as to the request to sell, notice of sale, time,
place, terms and manner of sale, and receipt, application, and distribution of
the money realized therefrom, or as to the due and proper appointment of a
substitute trustee, and, without being limited by the foregoing, as to any other
or additional act or thing having been done by Mortgagee or the Trustee, shall
be taken by all courts of law and equity as prima facie evidence that the
statements or recitals state facts and are without further question to be so
accepted. Mortgagor does hereby ratify and confirm any and all acts that the
Trustee may lawfully do in the premises by virtue of the terms and conditions of
this Deed of Trust.
          5.8 Suit to Collect and Foreclose. Mortgagee, at its election, or the
Trustee, upon written request of Mortgagee, may proceed by suit or suits, at law
or in equity, to enforce the payment of the Indebtedness in accordance with the
terms hereof and of the notes, guaranties, or other documents evidencing it, and
to foreclose the Lien of this Deed of Trust as against all or any portion of the
Mortgaged Property and to have such Property sold under the judgment or decree
of a court of competent jurisdiction.
          5.9 Mortgagee or Trustee as Purchaser. Mortgagee or the Trustee may be
a purchaser of all or any portion of the Mortgaged Property at any sale thereof,
whether such sale be under the power of sale hereinabove vested in the Trustee,
upon any other foreclosure of the Lien hereof, or otherwise. Mortgagee or the
Trustee so purchasing shall, upon any such purchase, acquire title to the
Mortgaged Property so purchased, free of the Lien of this Deed of Trust and free
of all rights of redemption in Mortgagor.
          5.10 Entry and Operation. Upon the occurrence of any Event of Default,
then in each and every such case and in addition to the other rights and
remedies hereunder, the Trustee or Mortgagee, whether or not the Indebtedness
shall have become due and payable, may, but shall not be obligated to, enter
into and upon and take possession of all or any portion of the Mortgaged
Property and may exclude Mortgagor, its agents and servants wholly therefrom and
have, hold, use, operate, manage, and control all or any portion of the
Mortgaged Property and produce the oil, gas, and other minerals therefrom and
market the same, all at the sole risk and expense of Mortgagor and at the
expense of the Mortgaged Property, applying the net proceeds so derived, first,
to the cost of maintenance and operation of such Mortgaged Property; second, to
the payment of the Indebtedness, application to be made first to interest and
then to principal; and the balance thereof, if any, shall be paid to Mortgagor.
Upon such payment of all such costs and Indebtedness, the Mortgaged Property
shall be returned to Mortgagor in its then condition, and neither the Trustee
nor Mortgagee shall be liable to Mortgagor for any damage or injury to the
Mortgaged Property except such as may be caused through the fraud or willful
misconduct of the Trustee or Mortgagee, as the case may be.

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          5.11 Power of Attorney to Mortgagee. Mortgagor does hereby designate
Mortgagee as the agent of Mortgagor to act in the name, place, and stead of
Mortgagor in the exercise of each and every remedy set forth herein and in
conducting any and all operations and taking any and all action reasonably
necessary to do so, recognizing such agency in favor of Mortgagee to be coupled
with the interests of Mortgagee under this Deed of Trust and, thus, irrevocable
so long as this Deed of Trust is in force and effect.
          5.12 Remedies Cumulative and Non-Exclusive. The rights of entry, sale,
or suit, as hereinabove or hereinafter conferred, are cumulative of all other
rights and remedies herein or by law or in equity provided, and shall not be
deemed to deprive Mortgagee or the Trustee of any such other legal or equitable
rights or remedies, by judicial proceedings or otherwise, appropriate to enforce
the conditions, covenants, and terms of this Deed of Trust and the other Loan
Documents. The employment of any remedy hereunder or otherwise shall not prevent
the concurrent or subsequent employment of any other appropriate remedy or
remedies.
ARTICLE 6
ASSIGNMENT OF PRODUCTION
          6.1 Assignment. In addition to the conveyance to the Trustee herein
made, Mortgagor does hereby transfer, assign, deliver and convey unto Mortgagee,
its successors and assigns, all of the oil, gas, and other minerals produced,
saved, or sold from the Mortgaged Property and attributable to the interests of
Mortgagor therein subsequent to 7:00 a.m. on the first day of the month in which
this Deed of Trust is executed, together with the proceeds of any sale thereof.
Mortgagor hereby directs any purchaser now or hereafter taking any production
from the Mortgaged Property to pay to Mortgagee such proceeds derived from the
sale thereof and to continue to make payments directly to Mortgagee until
notified in writing by Mortgagee to discontinue the same. The purchaser of any
such production shall not be required to see to the application of the proceeds
thereof by Mortgagee, and payment made to Mortgagee shall be binding and
conclusive as between such purchaser and Mortgagor. Mortgagor further agrees to
perform all such acts and to execute all such further assignments, transfer and
division orders, and other instruments as maybe required or desired by Mortgagee
or any other party to have such proceeds and revenues so paid to Mortgagee.
          6.2 Postponement of Payment. For its convenience, Mortgagee has
elected not to exercise immediately its right to receive payment to it directly
of the proceeds of any sale of the oil, gas and other minerals produced or sold
from the Mortgaged Property and the purchasers may continue to make such payment
or delivery of the proceeds to Mortgagor until such time as Mortgagor and the
purchasers have received notice that an Event of Default has occurred and is
continuing, and that the purchasers are directed to make payment or delivery of
the proceeds directly to Mortgagee. Such failure by Mortgagee to exercise its
rights immediately shall not in any way waive the right of Mortgagee to receive
any of the proceeds, or to make any such demand, or to affect any such
assignment as to any proceeds not theretofore paid or delivered to Mortgagor. In
this regard, if any of the proceeds are paid or delivered directly to Mortgagee
and then, at the request of Mortgagee, the proceeds are, for a period or periods
of time, paid or delivered to Mortgagor, Mortgagee shall nevertheless have the
right, effective upon written notice, to require that future proceeds be again
paid or delivered directly to it. Mortgagee shall never be required to send any
such

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notice to all purchasers, and may direct such notice only to those purchasers as
it may, in its discretion, desire. It shall never be necessary for Mortgagee to
institute legal proceedings to enforce the assignment of hydrocarbons, proceeds,
or other rents, profits, or income contained in this instrument. It shall not be
necessary for Mortgagee to obtain possession of the Mortgaged Property as a
prerequisite to Mortgagee’s right to collect or receive any hydrocarbons, other
minerals, proceeds, or other rents, profits, or income assigned to Mortgagee
under this instrument. Mortgagor and Mortgagee expressly agree and it is the
express intention of Mortgagor and Mortgagee that in no event will any reduction
in the obligations be measured by the fair market value of the hydrocarbons,
other minerals, proceeds, or other rents, profits, or income assigned to
Mortgagee under this instrument.
          6.3 Change of Purchaser. Should any purchaser taking the production
from the Mortgaged Property fail to make prompt payment to Mortgagee in
accordance with the provisions of Section 6.1, Mortgagee shall have the right,
at the expense of Mortgagor, to demand a change of connection and to designate
another purchaser with whom a new connection may be made, without any liability
on the part of Mortgagee in making such selection, so long as ordinary care is
used in the making thereof. Promptly upon such demand, Mortgagor shall take all
necessary and appropriate action to effect such change of connection.
          6.4 Application of Proceeds. Mortgagor authorizes and empowers
Mortgagee to receive, hold, and collect all sums of money paid to Mortgagee in
accordance with the provisions of Section 6.1, and to apply the same as
hereinafter provided, all without any liability or responsibility on the part of
Mortgagee, save and except as to good faith in so receiving and applying such
sums. Mortgagee may apply all sums received by Mortgagee pursuant to Section 6.1
to the payment of the Indebtedness, application to be made in such manner as
Mortgagee may elect, regardless of whether the application so made shall exceed
the payments of principal and interest then due as provided in the Loan
Documents. After such application has been so made by Mortgagee, the balance of
any such sums shall be paid to Mortgagor.
          6.5 No Postponement of Installments on Indebtedness. It is understood
and agreed that should such payments provided for by Section 6.1 be less than
the sum or sums then due on the Indebtedness, such sum or sums then due shall
nevertheless be paid by Mortgagor in accordance with the provisions of the Loan
Documents, and neither the assignment made pursuant to Section 6.1 nor any other
provisions hereof shall in any manner be construed to affect the terms and
provisions of the Loan Documents. Likewise, neither the assignment made pursuant
to Section 6.1 nor any other provisions hereof shall in any manner be construed
to affect the Liens, rights, title, and remedies herein granted securing the
Indebtedness or the liability of Mortgagor therefor. The rights under this
Article VI are cumulative of all other rights, remedies, and powers granted
under this Deed of Trust and are cumulative of any other security which
Mortgagee now holds or may hereafter hold to secure the payment of the
Indebtedness.
          6.6 Turnover to Mortgagee. Should Mortgagor receive any of the
proceeds of any sale of oil, gas, or other minerals produced, saved, or sold
from the Mortgaged Property, which under the terms hereof should have been
remitted to Mortgagee, Mortgagor will immediately remit same in full to
Mortgagee.

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          6.7 Release of Proceeds Upon Payment of Indebtedness. Upon payment in
full of all Indebtedness and the termination of the Commitment, the remainder of
such proceeds held by Mortgagee, if any, shall be paid over to Mortgagor upon
demand, and a release of the interest hereby assigned will be made, without
recourse or warranty, by Mortgagee to Mortgagor at its request and its expense.
          6.8 Duty of Mortgagee. Mortgagee shall not be liable for any failure
to collect, or for any failure to exercise diligence in collecting, any funds
assigned hereunder. Mortgagee shall be accountable only for funds actually
received.
          6.9 Power of Attorney to Mortgagee. Mortgagor does hereby designate
Mortgagee as the agent of Mortgagor to act in the name, place, and stead of
Mortgagor for the purpose of taking any and all actions deemed by Mortgagee
necessary for the realization by Mortgagee of the benefits of the assignment of
production provided herein, recognizing such agency in favor of Mortgagee to be
coupled with the interests of Mortgagee under this Deed of Trust and, thus,
irrevocable so long as this Deed of Trust is in force and effect.
ARTICLE 7
MISCELLANEOUS
          7.1 Further Assurances. Upon request of Mortgagee, Mortgagor will
promptly correct any defects, errors, or omissions in the execution or
acknowledgment of this Deed of Trust or any other Loan Document, and execute,
acknowledge, and deliver such other assurances and instruments as shall, in the
opinion of Mortgagee, be necessary to fulfill the terms of this Deed of Trust.
          7.2 Interest. Any provision in any document that may be executed in
connection herewith to the contrary notwithstanding, Mortgagee shall in no event
be entitled to receive or collect, nor shall any amounts received hereunder be
credited so that Mortgagee shall be paid, as interest a sum greater than that
authorized by law. If any possible construction of this Deed of Trust or any
Loan Document seems to indicate any possibility of a different power given to
Mortgagee or any authority to ask for, demand, or receive any larger rate of
interest, this clause shall override and control, and proper adjustments shall
be made accordingly.
          7.3 Agreement as Entirety. This Deed of Trust, for convenience only,
has been divided into Articles, Sections, and subsections. The rights, powers,
privileges, duties, and other legal relations of Mortgagor, the Trustee, and
Mortgagee shall be determined from this Deed of Trust as an entirety and without
regard to the aforesaid division into Articles, Sections, and subsections and
without regard to headings affixed to such Articles, Sections, or subsections.
          7.4 Number and Gender. Whenever the context requires, reference herein
made to the single number shall be understood to include the plural, and the
plural shall likewise be understood to include the singular. Words denoting sex
shall be construed to include the masculine, feminine, and neuter when such
construction is appropriate; and specific enumeration shall not exclude the
general, but shall be construed as cumulative.

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          7.5 Rights and Remedies Cumulative. All rights, powers, immunities,
remedies, and Liens of Mortgagee existing and to exist hereunder or under any
other instruments or at law or in equity and all other or additional security
shall be cumulative and not exclusive, each of the other. Mortgagee shall, in
addition to the rights and remedies herein expressly provided, be entitled to
such other remedies as may now or hereafter exist at law or in equity for
securing and collecting the Indebtedness, for enforcing the covenants herein,
and for foreclosing the Liens hereof. Resort by Mortgagee to any right or remedy
provided for hereunder or at law or in equity shall not prevent concurrent or
subsequent resort to the same or any other right or remedy. No security
heretofore, herewith, or subsequently taken by Mortgagee shall in any manner
impair or affect the security given by this Deed of Trust or any security by
endorsement or otherwise presently or previously given; and all security shall
be taken, considered, and held as cumulative.
          7.6 Parties in Interest. This Deed of Trust shall be binding upon the
parties and their respective heirs, administrators, legal representatives,
successors, and assigns and shall inure to the benefit of the Mortgagee and its
legal representatives, successors, and assigns. The terms used to designate any
of the parties herein shall be deemed to include the heirs, administrators,
legal representatives, successors, and assigns of such parties. The term
“Mortgagee” shall also include any lawful owner, holder, or pledgee of any
Indebtedness.
          7.7 Supplements. Without in any manner limiting the effect of
Section 1.4 or any other provisions of this Deed of Trust as to the binding
effect of this Deed of Trust on after-acquired rights of Mortgagor, it is
contemplated by the parties hereto that from time to time additional interests
and properties may or will be added to the interests and properties subject to
the Liens, rights, titles, and interests created by this Deed of Trust by means
of supplemental indentures identifying this Deed of Trust and describing such
interests and properties to be so added and included. Upon the execution of any
such supplemental indenture, the Liens, rights, titles, and interests created
herein shall immediately attach to and be effective with respect to any such
interests and properties so described, the same as if such interests and
properties had been specifically described herein, and such interests and
properties being included in the term “Mortgaged Property,” as used herein.
          7.8 Invalidity. In the event that any one or more of the provisions
contained in this Deed of Trust shall for any reason be held invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Deed of Trust or
any other Loan Document.
          7.9 Construction. All titles or headings to Articles, Sections,
subsections, or other divisions of this Deed of Trust or the exhibits hereto are
only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such Articles, Sections,
subsections, or other divisions, such other content being controlling as to the
agreement among the parties hereto. Article, Section, subsection, and Exhibit
references herein are to such Articles, Sections, subsections, and Exhibits of
this Deed of Trust unless otherwise specified. The words “hereby,” “herein,”
“hereinabove,” “hereinafter,” “hereinbelow,” “hereof,” and “hereunder” when used
in this Deed of Trust shall refer to this Deed of Trust as a whole and not to
any particular Article, Section, subsection, or provision of this Deed of Trust.

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          7.10 Fixtures, Minerals and Accounts. Without in any manner limiting
the generality of any of the foregoing hereof, some portions of the personal
Property described hereinabove are or are to become fixtures on the Lands. In
addition, the security interest created hereby under applicable provisions of
the UCC attaches to minerals, including oil and gas, and accounts resulting from
the sale thereof, at the wellhead or minehead located on the Lands.
          7.11 Financing Statement Filings. This Deed of Trust may be filed as
provided in Article 9 of the UCC to assure that the security interests granted
by this Deed of Trust are perfected. In this connection, this Deed of Trust may
be presented to a filing officer under the UCC to be filed in the real estate
records as a Financing Statement covering minerals and fixtures. Further,
Mortgagor authorizes Mortgagee to execute and file at any time and from time to
time any and all Financing Statements and amendments thereto in any UCC
jurisdiction, pursuant to Article 9 of the UCC, as Mortgagee deems necessary in
its sole discretion, in conjunction with this Deed of Trust, and Mortgagor
expressly authorizes execution and filing of such Financing Statements by
Mortgagee without need of signature or execution by Mortgagor.
          7.12 Addresses. For purposes of filing this Deed of Trust as a
financing statement, the addresses for Mortgagor, as the debtor, and Mortgagee,
as the secured party, are as set forth hereinabove.
          7.13 Counterparts. For the convenience of the parties, this Deed of
Trust may be executed in multiple counterparts, each of which for all purposes
shall be deemed, and may be enforced from time to time as, a chattel mortgage,
real estate mortgage, deed of trust, security agreement, assignment or contract,
or as one or more thereof. For recording purposes, various counterparts have
been executed, and there may be attached to each such counterpart an Exhibit A
containing only the description of the Mortgaged Property, or portions thereof,
which relates to the county or state in which the particular counterpart is to
be recorded. A complete, original counterpart of this Deed of Trust with a
complete Exhibit A may be obtained from Mortgagee. Each of the counterparts
hereof so executed shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
          7.14 No Waiver by Mortgagee. No course of dealing on the part of
Mortgagee, its officers or employees, nor any failure or delay by Mortgagee with
respect to exercising any of its rights or remedies hereunder shall operate as a
waiver thereof nor shall the exercise or partial exercise of any such right or
remedy shall preclude the exercise of any other right or remedy.
          7.15 Governing Agreement. This Deed of Trust is made pursuant and
subject to the terms and provisions of the Credit Agreement. In the event of a
conflict between the terms and provisions of this Deed of Trust and those of the
Credit Agreement, the terms and provisions of the Credit Agreement shall govern
and control. The inclusion in this Deed of Trust of provisions not addressed in
the Credit Agreement shall not be deemed a conflict, and all such additional
provisions contained herein shall be given full force and effect.

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          IN WITNESS WHEREOF, this Deed of Trust is executed on the date of the
acknowledgment below but effective as of the 29th day of June, 2006.

                  MORTGAGOR (DEBTOR):    
 
                Prime Offshore L.L.C.
(fka F-W Oil Exploration L.L.C.)    
 
           
 
  By:   /s/ Beverly A. Cummings    
 
           
 
      Beverly A. Cummings    
 
      Chief Executive Officer    

 

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THE STATE OF CONNECTICUT
  §     
 
       
 
  §     
COUNTY OF FAIRFIELD
  §     

          BEFORE ME, the undersigned authority, on this day personally appeared
BEVERLY A. CUMMINGS, Chief Executive Officer of PRIME OFFSHORE L.L.C., a
Delaware limited liability company, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that she executed
the same for the purposes and consideration therein expressed, as the act and
deed of such limited liability company and in the capacity therein stated.
          GIVEN UNDER MY HAND AND SEAL OF OFFICE this 29 day of June, 2006.

         
 
  /s/ Joan Podlovits    
 
       
 
  NOTARY PUBLIC in and for    
 
  Fairfield County, Connecticut    
 
       
 
  JOAN PODLOVITS    
 
  NOTARY PUBLIC    
 
  MY COMMISSION EXPIRES MAY 31, 2008    

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EXHIBIT A
TO
MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION
          The designation “Working Interest” or “WI” when used in this Exhibit
means an interest owned in an oil, gas, and mineral lease that determines the
cost-bearing percentage of the owner of such interest. The designation “Net
Revenue Interest” or “NRI” means that portion of the production attributable to
the owner of a working interest after deduction for all royalty burdens,
overriding royalty burdens or other burdens on production, except severance,
production, and other similar taxes. The designation “Overriding Royalty
Interest” or “ORRI” means an interest in production which is free of any
obligation for the expense of exploration, development, and production, bearing
only its pro rata share of severance, production, and other similar taxes and,
in instances where the document creating the overriding royalty interest so
provides, costs associated with compression, dehydration, other treating or
processing, or transportation of production of oil, gas, or other minerals
relating to the marketing of such production. The designation “Royalty Interest”
or “RJ” means an interest in production which results from an ownership in the
mineral fee estate or royalty estate in the relevant land and which is free of
any obligation for the expense of exploration, development, and production,
bearing only its pro rata share of severance, production, and other similar
taxes and, in instances where the document creating the royalty interest so
provides, costs associated with compression, dehydration, other treating or
processing or transportation of production of oil, gas, or other minerals
relating to the marketing of such production.
          Any reference in this Exhibit to wells or units is for warranty of
interest, administrative convenience, and identification and shall not limit or
restrict the right, title, interest, or properties covered by this Deed of
Trust. All right, title, and interest of Mortgagor in the properties described
herein are and shall be subject to this Deed of Trust, regardless of the
presence of any units or wells not described herein.
          The references to book or volume and page herein refer to the
recording location of each respective Mortgaged Property described herein in the
county where the land covered by the Mortgaged.

A-i

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OIL, GAS AND MINERAL INTERESTS
South Padre Island 1113
Oil and Gas Lease OCS-G-24302, granted by the United States of America to F-W
Oil Exploration L.L.C., dated effective November 1, 2002, covering all of Block
1113, South Padre Island Area, OCS Leasing Map, Texas Map No. 1, offshore
Cameron County, Texas.

         
Working Interest
    75.0000  
Net Revenue Interest
    60.2500  

South Padre Island 1133
Oil and Gas Lease OCS-G-26431, granted by the United States of America to F-W
Oil Exploration L.L.C., dated effective November 1, 2004, covering all of Block
1133, South Padre Island Area, OCS Leasing Map, Texas Map No. 1, offshore
Cameron County, Texas.

         
Working Interest
    75.0000  
Net Revenue Interest
    60.2500  

A-ii