Document:

ex_353536.htm

Exhibit 10.3

 

THIS SENIOR SECURED CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION. 

 

SENIOR SECURED COVERTIBLE PROMISSORY NOTE

 

Houston, Texas

 

	Principal Sum: $5,000,000.00         	[●]

 

FOR VALUE RECEIVED, ALPHA ENERGY, Inc. (“Maker,” or, the “Company”), whose address is 4162 Meyerwood Drive, Houston, TX 77025 promises to pay to the order of ___________“Payees”, at places designated in writing in advance by Payees, when due, the principal sum of Five Million Dollars ($5,000,000.00) (the “Principal Amount”). The obligations of Maker under this Note are secured by the Pledge and Security Agreement, attached hereto as Exhibit “A”, as it may be amended from time to time, between Maker and Payees.

 

1.    Interest. Interest shall accrue quarterly at seven and twenty-five hundreth percent (7.25%) on the Principal Amount payable quarterly. There shall be interest only payments made during the term of this note. The first payment shall be due and payable on __________ and shall be paid on the fifth day of the subsequent twelve months.

 

2.    Payments. The Principal Amount shall be due and payable two years after date of contract (the “Maturity Date”). All amounts payable hereunder are payable in lawful money of the United States of America. Payment shall be deemed made and effective at 11:59 p.m. Central Standard Time on the date of payment, regardless of the actual time of delivery of such payment. All payments whether principal or interest payments shall be made to the address specified by the notice section of this agreement.

 

3.    Prepayment at Option of Maker. Maker may prepay in cash all (but not less than all) of the Principal Amount of this Note prior to the Maturity Date without the prior written consent of Payees.

 

4.    Use of Proceeds. The Company shall apply the $5,000,000.00 Proceeds pursuant to the Use of Proceeds in Exhibit “D”.

 

5.    Consent Requirements. So long as any Principal Amount remains outstanding hereunder, Maker shall not, in each case without first obtaining the prior written consent of Payees:

 

	 	
			a.

				
			create or issue any debt securities or incur any indebtedness or redeem, repurchase, prepay or otherwise acquire any outstanding debt securities or indebtedness of Maker (other than trade payables incurred in the ordinary course of business consistent with past practice), except as expressly required by the terms of such securities or indebtedness;

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

1

 

 

	 	
			b.

				
			sell all or substantially all of Maker’s assets or stock, or consolidate or merge with another entity;

			

 

	 	
			c.

				
			liquidate, dissolve, recapitalize or reorganize;

			

 

	 	
			d.

				
			enter into any agreement, commitment, understanding or other arrangement to take any of the foregoing actions; or

			

 

	 	
			e.

				
			cause or authorize any subsidiary of Maker to engage in any of the foregoing actions.

			

 

6.    Conversion Options. 

 

	 	
			a.

				
			Subject to Section 7, Payees may convert this Note on the Maturity Date into that number of shares of common stock of Maker that results from dividing the Principal and Interest Amount by $5.00

			

 

	 	
			b.

				
			Payees shall effect the conversion of this Note pursuant to this Section 6 by providing notice to Maker of its intent to convert and surrendering this Note to Maker. Not later than ten trading days after receipt of such notice and the surrendered Note from Payees, Maker shall deliver to Payees a certificate or certificates representing the number of shares of common stock being acquired upon the conversion of this Note.

			

 

	 	
			c.

				
			In case Maker shall, after the original issue date of this Note (i) subdivide its outstanding shares of common stock into a greater number of shares or issue additional shares of common stock for no consideration as a stock dividend, (ii) combine its outstanding shares of common stock into a smaller number of shares of common stock, or (iii) issue any shares of its capital stock in a reclassification of the common stock, then the number of common shares receivable upon conversion of this Note immediately prior thereto shall be adjusted so that Payees shall be entitled to receive the kind and number of common shares or other securities of Maker which it would have owned or have been entitled to receive had this Note been converted in advance thereof. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. Payees shall submit a Form of Conversion, as attached to this document as Exhibit “C”. 

			

 

7.    Limitation on Conversion. Notwithstanding anything to the contrary herein, in no event shall this Note be converted into shares of common stock or other securities of the Company to the extent that such conversion would result in Payees and its affiliates together beneficially owning more than 4.99% of the outstanding shares of common stock. For purposes of this Section 7, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

2

 

 

8.    Events of Default; Attorneys’ Fees. As used in this Note, an “Event of Default” means any one of the following events (whatever the reason of such Event of Default, and whether it be voluntary or be effected by operation of law):

 

	 	
			a.

				
			Default in the payment of the Principal Amount of this Note when it becomes due and payable and continuance of such default for a period of five trading days after there has been received by Maker from Payees a written notice specifying such default;

			

 

	 	
			b.

				
			Breach by Maker of any other material term hereunder (except with respect to the matters covered by subparagraph (a) above, as to which subparagraph (a) shall apply) or under the Security Agreement, and if such breach is curable, failure to cure such breach within ten trading days after there has been received by Maker from Payees a written notice specifying such breach;

			

 

	 	
			c.

				
			The entry by a court or agency or other authority having competent jurisdiction of: (1) a decree or order for relief in respect of Maker in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; (2) a decree or order adjudging Maker to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of Maker and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (3) a decree or order appointing any person or entity to act as a custodian, conservator, receiver, liquidator, assignee, trustee or other similar official of Maker or of any substantial part of the property of Maker, or ordering the winding up or liquidation of the affairs of Maker and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

			

 

	 	
			d.

				
			The commencement by Maker of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by Maker to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filing by Maker of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by Maker to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of Maker or any substantial part of the property of Maker or the making by Maker of an assignment for the benefit of creditors.

			

 

If an Event of Default occurs and is continuing, then Payees may declare the Principal Amount of this Note to be due and payable immediately, by a notice in writing to Maker, and upon any such declaration, such amount shall become immediately due and payable. Maker hereby agrees to pay reasonable attorneys’ fees and all other reasonable costs and expenses incurred, after an Event of Default, in the enforcement of this Note, the enforcement of any security interest with respect to this Note, and the collection of amounts due hereunder, whether such enforcement or collection is by court action or otherwise.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

3

 

 

Any Principal Amount which is not paid when due shall result in a late charge being incurred and payable by Maker in an amount equal to interest on such amount at the rate of 7.25% per annum from the date such amount was due until the same is paid in full.

 

9.    Liquidation, Dissolution or Winding Up. In the event of any liquidation, insolvency, dissolution or winding up of Maker, whether voluntary or involuntary, Payees shall be entitled, subject to the applicable provisions of applicable bankruptcy, insolvency or similar laws to be paid first out of the assets of Maker, whether such assets are capital, surplus or earnings, an amount (the “Liquidation Value”) equal to sum of the applicable Principal Amount. Whenever the distributions provided for in this Section 9 shall be payable in property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board of Directors of Maker. For purposes of this Section 9, the following shall be deemed to be a liquidation, dissolution, or winding up of Maker: (i) the sale of all or substantially all of the assets of Maker, (ii) the merger or consolidation of Maker with or into any other entity (other than a merger or consolidation in which shares of Maker’s voting capital stock outstanding immediately before such merger or consolidation are exchanged or converted into or constitute shares which represent more than fifty percent (50%) of the surviving entity’s voting capital stock after such consolidation or merger), and (iii) a transaction or series of related transactions in which a person or group of persons (as defined in Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acquires beneficial ownership (as determined in accordance with Rule 13d-3 of the Exchange Act) of more than 50% of the voting power of the Maker in a business combination transaction. The provisions of this Section 9 shall not apply to any reorganization, merger or consolidation involving (1) only a change in the state of incorporation of Maker, (2) a merger of Maker with or into a wholly-owned subsidiary of Maker that is incorporated in the United States of America, or (3) an acquisition by Maker by merger, reorganization or consolidation, after which Maker is substantively the surviving company and operates as a going concern, of another entity incorporated in the United States of America that is engaged in a business similar or related to the business of Maker.

 

10.    Certain Actions Prohibited. Maker shall not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may reasonably be requested by the holder of this Note in order to protect the exchange privileges of Payees against impairment, consistent with the tenor and purpose of this Note.

 

11.    No Transfer; Miscellaneous. Neither Payees nor Maker may assign or otherwise transfer this Note or any interest therein to any other person or entity without the express written consent of the other. This Note shall be binding upon any entity succeeding to Maker by operation of law. Maker waives demand for payment, presentment for payment, notice of dishonor, protest and notice of protest. This Note shall be governed as to validity, interpretation, construction, effect and in all other respects by the laws and decisions of the State of Colorado. No delay or omission by Payees in exercising any power or right hereunder shall impair such right or power or be construed to be a waiver of any default, nor shall any single or partial exercise of any power or right hereunder preclude any or full exercise thereof or the exercise of any other right or power. Each legal holder hereof shall have and may exercise all the rights and powers given to Payees herein. If any provision of this Note shall be prohibited or invalid, under applicable law, it shall be ineffective only to such extent, without invalidating the remainder of this Note.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

4

 

 

12.    Waivers; Forbearance; Acknowledgements. 

 

	 	
			a.

				
			Payees acknowledges that it is aware of Maker’s current financial situation.

			

 

	 	
			b.

				
			Payees acknowledges that Maker is seeking additional financing and that no assurance can be provided by Maker that it will be able to satisfy its obligations to Payees under this Note if Maker fails to obtain such financing.

			

 

13.    Amendment. No term of this Note may be amended or waived without the written consent of Maker and Payees.

 

[Signature Page Follows]

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

5

 

 

The issuance date of this Note is _________, 2022 , and this Note is executed on the date stated below.

 

AGREED AND ACCEPTED

 

	 	 	
			ALPHA ENERGY, INC.

			
	
			(Payees)

				 	
			(Maker)

			
	 	 	 
	 	 	 
	 	 	 
	
			By:

				 	
			By: John Lepin

			
	
			Title:

				 	
			Title: COB / Principal Financial Officer

			
	 	 	 
	 	 	 
	 	 	 
	
			(Payees)

				 	 
	 	 	 
	 	 	 
	 	 	 
	
			By:

				 	 
	
			Title:

				 	 

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

6

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit List

 

 

Exhibits for Senior Secured Convertible:

 

	Exhibit “A”	Pledge and Security Agreement
	Exhibit “B”	Logan 1: Form of Purchase and Sale Agreement
	 	Logan 1 Option Agreements
	Exhibit “C”	Notice of Conversion
	Exhibit “D”	Asset Purchase and Start-Up Budget
	Exhibit “E”	Logan 1 Reserve Report Effective October 1st, 2021
	Exhibit “F”	Form of Mortgage Agreement

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note

7

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “A”

 

 

PLEDGE AND SECURITY AGREEMENT

 

This PLEDGE AND SECURITY AGREEMENT (the “Agreement”), dated [•] , is made by and between Alpha Energy Inc., a Colorado corporation , (the “Debtor”), and ____________ (the “Holder”), (the “Secured Party”) (together referred to as the “Parties”).

 

RECITALS

 

A.    Prior to or concurrently with the execution of this Agreement, the Debtor and the Secured Party are entering into a Senior Secured Convertible Promissory Note (the “Note Agreement”) providing for a loan of Five Million dollars and No Cents ($5,000,000.00) Promissory Note (the "7.25% Senior Secured Convertible Promissory Notes," the "Transaction Documents").

 

B.    As a condition precedent to the Secured Party entering into the Purchase Agreement, the Secured Party has required that the obligations of Borrower under the Notes be secured by a security interest in certain assets of Debtor in accordance with the terms of this Security Agreement.

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending to be bound, do hereby agree as follows:

 

	 	
			1.

				
			Grant of Security Interest and Collateral Assignment. As collateral security for the due and punctual payment and performance of the Secured Obligations, as defined in Section 2 (Secured Obligations) the Debtor hereby grants to the Secured Party, with full power and authority to exercise all rights and powers granted by the Debtor hereunder, a lien upon, and a security interest, in and to, and hereby collaterally assigns to the Secured Party, the following assets (the “Collateral”):

			

 

All assets obtained by the debtor in the attached Purchase and Sale Agreement between Alpha Energy, Inc and Progressive Well Service, LLC executed simultaneously on March 17, 2022_ attached hereto as Exhibit “B”, valued per independent engineering reserve analysis attached hereto as Exhibit “E”, and utilizing the Form of Mortgage Agreement attached hereto as Exhibit “F”.

 

	 	
			2.

				
			Secured Obligations. The debts, obligations and liabilities secured hereby (the “Secured Obligations”) are the following: (i) any and all obligations of the Debtor to the Secured Party under the Senior Secured Convertible Promissory and any and all other obligations to or agreements with the Secured Party; (ii) the full amount of any indemnity arising under Section 3; and, (iii) any and all other obligations of Debtor hereunder.

			

 

	 	
			3.

				
			No Secured Party Liability re Company; Indemnification. This pledge and security interest is for Collateral purposes only, and the Secured Party shall not, either by virtue hereof, or by the retention of distributions to which the Debtor would otherwise be entitled, or by virtue of its receipt of distributions from the Company, or by the exercise of any of its rights hereunder, be deemed to be a partner or principal of the Company or to have any liability for the debts, obligations or liabilities of the Company, the Debtor or any other participant in the Company or to have any obligation to make capital contributions to the Company. The Debtor shall indemnify and hold harmless the Secured Party in its capacity as Secured Party from and against any and all liability, loss or damage which it may suffer or incur and which arises out of or results from:

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

8

 

 

(a) The Company’s organizational documents or any agreement to which the Company may be a party (a “Company Agreement”), including, without limitation, the Debtor being named as a general or limited partner therein or acting in such capacity pursuant to the terms thereof and the Transaction Documents;

 

(b) This Agreement or the Secured Party’s receipt of distributions or the lawful exercise of any rights of the Secured Party hereunder; and

 

(c) Any claimed or any alleged obligation, liability or duty on the part of the Secured Party to perform or discharge any of the terms, covenants or provisions of any Company Agreement; together, in each instance, with all costs and expenses (including, without limitation, court costs and reasonable attorneys’ fees) paid or incurred in connection therewith. Notwithstanding the foregoing, the Debtor shall not be obligated to indemnify the Secured Party hereunder for any liability, loss or damage which the Secured Party may suffer or incur as a result of gross negligence or willful misconduct directly caused by the Secured Party. The Debtor shall reimburse the Secured Party upon demand for the full amount of any indemnity to which the Secured Party may be entitled hereunder, and the full amount of the Debtor’s indemnity obligation shall be considered to be a Secured Obligation and shall be secured hereby.

 

	 	
			4.

				
			Further Assurances. Debtor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of Debtor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the Uniform Commercial Code or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by the Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment, including, but not limited to (i) whether Debtor is an organization, the type of organization and (ii) any organization identification number issued to Debtor. Debtor agrees to furnish any such information to Secured Party promptly upon request. Debtor also ratifies its authorization for Secured Party to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.

			

 

	 	
			5.

				
			Representations, Warranties and Covenants. The Debtor represents and warrants to, and covenants with, the Secured Party that:

			

 

5.1          No Certificates. The Collateral is not represented or evidenced by any form of certificate or other document which is an instrument (as defined in the UCC); and to the extent so certificated, the Debtor shall comply with the provisions of Section 4 (Certificates).

 

5.2          No Liens. The Collateral is not subject to any restriction which would prohibit or restrict the granting of a security interest in and collateral assignment of the Interest pursuant hereto, or any restriction which would prohibit or restrict the sale or other disposition of the Collateral upon default hereunder.

 

5.3          Authority. The Debtor has all power, statutory and otherwise, to execute and deliver this Agreement, to perform its obligations hereunder and to subject the Collateral to the security interest created hereby, all of which has been duly authorized by all necessary action. The execution and delivery of this Agreement, and the performance of this Agreement and the enforcement of the security interest granted hereby, will not result in any violation of or be in conflict with or constitute a default under any term of any agreement or instrument, or any judgment, decree, order, law, statute, rule or governmental regulation applicable to the Debtor or the collateral, or result in the creation of any mortgage, lien, charge or encumbrance upon the Collateral or any other of the properties or assets of the Debtor (except pursuant hereto).

 

5.4          Ownership. The Debtor is the sole record and beneficial owner of the Collateral, and neither the Collateral nor the proceeds thereof are subject to any pledge, lien, security interest, charge or encumbrance except the lien created pursuant to this Agreement. The Debtor will defend the Collateral against all claims and demands on all persons at any time claiming any interest therein. Other than the financing statements filed pursuant to this Agreement, no currently effective financing statement covering the Collateral is on file in any public office where such financing statements are required or permitted to be filed pursuant to the UCC.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

9

 

 

5.5          Consent of Secured Party. The Debtor shall not enter into any amendment to any Company Agreement without the prior written consent of the Secured Party (which consent the Secured Party may give or withhold in its sole discretion), but which consent shall be deemed to be given if it is not denied within thirty (30) days after Debtor gives notice, pursuant to the provisions of Section 11, to the Secured Party and its attorney.

 

5.6          No Assignment. The Debtor shall not (i) sell, assign, pledge, encumber, grant a security interest in or otherwise transfer or dispose of, or create or suffer to be created any lien, security interest or encumbrance on, any of the Collateral or this Agreement without the prior written consent of the Secured Party (which consent the Secured Party may give or withhold in its sole discretion). The Debtor shall give the Secured Party prompt and detailed notice (i) of any lien, security interest, encumbrance or claim made or asserted against any of the Collateral, (ii) of any distribution of cash or other property by the Company, whether in complete or partial liquidation or otherwise, and of any other material change in the composition of the Collateral, and (iii) of the occurrence of any other event which could have a material adverse effect on the aggregate value of the Collateral or on the security interest created hereunder.

 

5.7          Principal Address of Debtor. The Debtor’s principal place of business is 4162 Meyerwood Drive, Houston, TX 77025 and the office in which the records concerning the Collateral are kept is located at such address. The Debtor will not locate Debtor’s principal place of business or residence, as the case may be, at another address, and will not remove the Debtor’s records relating to the Collateral to another location without (i) giving the Secured Party thirty (30) days prior written notice thereof, and (ii) in connection with any such changes, executing and delivering, or causing to be executed and delivered, to the Secured Party all such additional security agreements, financing statements and other documents as the Secured Party shall reasonably require due to any such change. Debtor shall promptly transmit to Secured Party all information that it may have or receive with respect to Collateral or with respect to any account debtor which might in any way affect Secured Party's rights or remedies with respect thereto.

 

5.8          Name Changes. The Debtor will not change his name without (i) giving the Secured Party thirty (30) days prior written notice thereof and (ii) in connection with any such change, executing and delivering, or causing to be executed and delivered, to the Secured Party all such additional security agreements, financing statements and other documents as the Secured Party shall reasonably require to maintain its rights under this Agreement.

 

5.9          Distributions. The Debtor has agreed that all distributions on account of the Interest are to be paid directly to the Secured Party and Debtor shall obtain all consents required to do so, except that as long as no default or Event of Default exists hereunder or any document or instrument creating the Secured Obligations or standing as security therefor, the Debtor may retain such distributions.         

 

	 	
			6.

				
			Events of Default.

			

 

6.1          Events of Default. The occurrence of any one or more of the following events shall constitute an event of default (an “Event of Default”) under this Agreement: (i) should any representation or warranty made by or on behalf of the Debtor in this Agreement or in any document related hereto, including the Transaction Documents, be, or become, materially inaccurate (except to the extent rendered inaccurate by the mere passage of time or by reason of actions taken by the Debtor with the prior written consent of the Secured Party or expressly permitted hereby); or (ii) should the Debtor default in the due performance or observance of any term, covenant or agreement on his part to be performed or observed pursuant to this Agreement, pursuant to any document or instrument creating the Secured Obligations or standing as security therefor, or pursuant to any other agreement with the Secured Party, as the case may be.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

10

 

 

6.2          Remedies. If an Event of Default shall occur hereunder: (i) the Secured Party may take possession of the Collateral and may exclude the Debtor, and all persons claiming by, through or under the Debtor, from possession thereof, and may assign the Collateral to a nominee or a third party (it being understood that, in connection therewith, the Secured Party or any third party assignee or nominee of the Secured Party shall have the right to exercise, in the name of the Debtor, Debtor’s rights and powers as a principal including “Manager” of any LLC, if applicable, of the Company); and (ii) the Secured Party shall have all rights and remedies of a secured party available under the UCC and any other rights and remedies available under this Security Agreement or at law or in equity.

 

6.3          Substitute Principal. In the event of the taking of possession of the Collateral, the Secured Party or any third party assignee or nominee of the Secured Party, may, in addition to (but in no way limiting) the foregoing remedies, become a substitute principal in the Company (including, but not limited to, a partner in any partnership, a member and/or manager in any LLC or LLP, and a stockholder of any corporation).

 

6.4          Disposition of Collateral. More specifically, but in no way in limitation of the rights and remedies of the Secured Party, the Secured Party may, upon ten (10) days’ notice (which notice shall be deemed to satisfy any requirement of reasonable notification) to the Debtor of the time, place and circumstances of sale, and without liability for any diminution in price which may have occurred, sell or otherwise dispose of all or any part of the Collateral. Such sale or other disposition may be by public or private proceedings and may be made by way of one or more contracts, as a unit or in portions, at such time and place, by such method, and in such manner and on such terms, as the Secured Party may determine. At any public sale, the Secured Party shall be free to purchase all or any part of the Collateral. The Debtor recognizes that the fact that the Interest is not registered under the Securities Act of 1933 and is unlikely to be registered in the future may necessitate a private sale which is likely to result in a lower price than would a public sale, and hereby consents to such a private sale and agrees that the same is commercially reasonable.

 

6.5          Proceeds of Disposition. The proceeds of any sale or other disposition of or collection of or other realization upon all or any part of the Collateral (together with any cash held as Collateral hereunder), shall be applied in the following order of priority: First, to pay the costs and expenses of collection, custody, sale or other disposition or delivery (including, without limitation, reasonable legal costs and attorneys’ fees) and all other charges incurred by the Secured Party with respect to the Collateral; Second, to the payment of the Secured Obligations; and third, to pay any surplus to the Debtor or to any person or party lawfully entitled thereto, or as a court of competent jurisdiction may direct.

 

6.6          Sufficient Discharge. The receipt given by the Secured Party for the purchase money paid at any sale shall be a sufficient discharge therefor to any purchaser of all or any part of the Collateral sold. No such purchaser, after paying such purchase money and receiving such receipt, shall be bound to see to the application of such purchase money or any part thereof, or in any manner be answerable for any loss, misapplication or non-application of any such purchase money, or any part thereof, or be bound to inquire as to the authorization, necessity, expediency or regularity of any such sale.

 

	 	
			7.

				
			Attorney-in-Fact. The Secured Party is hereby appointed the attorney-in-fact, with full power of substitution, of the Debtor for the purpose of carrying out the provisions hereof and taking any action and executing any instruments, including, without limitation, financing or continuation statements, conveyances, assignments and transfers which are required to be taken or executed by the Debtor, and including any documents required to be signed by the Debtor to designate the Secured Party or its nominee or third party assignee, or the purchaser of all or part of the Collateral, as a substitute principal in the Company in the event of foreclosure, which the Secured Party may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is coupled with an interest and is irrevocable. The Debtor shall indemnify and hold harmless the Secured Party from and against any liability or damage which it may incur in the exercise and performance, in good faith, of any of its powers and duties specifically set forth herein, but not for any liability or damage incurred on account of the gross negligence or willful misconduct of the Secured Party. In addition, Secured Party is further granted the power, coupled with an interest, to sign on behalf of Debtor as attorney-in-fact and to file one or more financing statements under the Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and describing the Collateral herein specified.

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

11

 

 

	 	
			8.

				
			Waivers. To the extent permitted by law, the Debtor hereby waives any right he may have under applicable law, to notice or to a judicial hearing prior to the exercise of any right or remedy provided hereby to the Secured Party and waives the Debtor’s rights, if any, to set aside or invalidate any sale duly consummated in accordance with the provisions hereof on the grounds (if such be the case) that the sale was consummated without a prior judicial hearing. The Debtor’s waivers under this Section 8 have been made voluntarily, intelligently and knowingly, and after the Debtor has been apprised and counseled by the Debtor’s attorneys as to the nature thereof and the Debtor’s possible alternative rights. No delay or omission on the part of the Secured Party in exercising any right hereunder shall operate as a waiver of such right or of any right hereunder. Any waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any such future occasion. No course of dealing between the Debtor and the Secured Party nor any failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder or under any of the Secured Obligations, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Notwithstanding the immediately preceding provisions of this Section 8, in the event that other sections of this Agreement specifically grant the right of notice to the Debtor, the Debtor shall enjoy such specific rights, and the provisions of such other sections shall supersede the foregoing provisions of this Section 8.

			

 

	 	
			9.

				
			Termination; Assignments. This Agreement and the security interest in and lien on the collateral created hereby shall terminate when all of the Secured Obligations have been paid in full. In the event of a sale or assignment (including without limitation a collateral assignment) by the Secured Party of all or any part of the Secured Obligations held by it, the Secured Party shall be deemed to have assigned or transferred its rights and interests under this Agreement, to the extent of such sale or assignment, to purchaser or purchasers of such Secured Obligations, whereupon such purchaser or purchasers shall become vested with the powers and rights so assigned by the Secured Party hereunder and the Secured Party shall, to that extent, thereafter be released and discharged from any liability or responsibility hereunder, with respect to the rights and interest so assigned, but if and to the extent that the Secured Party retains any interest in the Collateral, the Secured Party will continue to have the rights and powers set forth herein with respect thereto.

			

 

	 	
			10.

				
			Governmental Approvals, Etc. Upon the exercise by the Secured Party of any power, right, privilege or remedy pursuant to this Agreement which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the Debtor shall execute and deliver, or will cause the execution and delivery of, all applications, certificates, instruments and other documents and papers that the Secured Party may require therefor.

			

 

	 	
			11.

				
			Notices. All notices, requests, demands, consents, approvals or other communications to or upon the respective parties hereto shall be done in accordance with the notice provisions set forth in Section 5.4 of the Purchase Agreement, unless an alternative method of notice is specifically required herein.

			

 

	 	
			12.

				
			Miscellaneous.

			

 

12.1       Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in Denver, County, Colorado. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the Harris County for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

12

 

 

12.3       Injunctive Relief. The Debtor agrees that the Debtor’s obligations and the rights of the Secured Party hereunder and under the Secured Obligation may be enforced by specific performance hereof and thereof and temporary, preliminary and/or final injunctive relief relating hereto and thereto, without necessity for proof by the Secured Party that the Secured Party would otherwise suffer irreparable harm, and the Debtor hereby consents to the issuance of such specific injunctive relief.

 

12.4       Secured Party Liability. The Secured Party shall be under no duty or liability with respect to the Collateral other than to use reasonable care in the custody of any certificate representing the Collateral while in its possession, and shall not be liable for any failure to take action necessary to preserve rights against prior parties on any instrument constituting Collateral. The Debtor agrees that in dealing with the Secured Party, the Debtor shall look solely to the assets and property of the Secured Party, in that no trustee, beneficiary, officer, director or agent of the Secured Party assumes any personal liability for the obligations of the Secured Party.

 

12.5        Cumulative Remedies. The rights and remedies of the Secured Party herein provided or provided under any other agreement or instrument, or otherwise available, are cumulative, and are in addition to and not exclusive of or in limitation of any rights and remedies provided by law, including, without limitation, the rights and remedies of secured party under the UCC.

 

12.6        Attorneys’ Fees. All costs and expenses, including without limitation, legal costs and reasonable attorneys’ fees, incurred by the Secured Party in enforcing this Agreement shall be chargeable to and secured by the Collateral hereunder.

 

12.7      Continuing Security Interest; Assignment. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the payment in full of the Secured Obligations and all other amounts payable under the 7.25% Convertible Note. All rights of the Secured Party hereunder shall inure to the benefit of its successors and assigns, and this Security Agreement shall bind the Debtor’s heirs, legal representatives, successors and assigns.

 

12.8       Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

12.9       Separability. If any provision hereof shall be invalid or unenforceable in any respect or in any jurisdiction, the remaining provisions hereof shall remain in full force and effect and shall be enforceable to the maximum extent permitted by law.

 

12.10      No Consent. No consent, approval or waiver hereunder or pursuant hereto shall be binding unless in writing.

 

12.11      Section Headings. The section headings provided in this Agreement are for convenience of reference only and shall not be considered in construing this Agreement.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

13

 

 

12.2        Amendments. No amendment or waiver of any provision of this Agreement, and no consent to any departure of the Debtor here from, shall in any event be effective, unless the same shall be in writing and signed by the parties.

 

 

[SIGNATURES ON FOLLLOWING PAGES]

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

14

 

 

IN WITNESS WHEREOF, the Parties have caused this Security and Pledge Agreement to be executed and effective on the day and year first written above.

 

DEBTOR:

 

ALPHA ENERGY, INC.

 

 

______________________________________________

 

By:         John Lepin

 

Its:          COB / Principal Financial Officer

 

 

SECURED PARTIES:         

 

______________________________________________

 

By:         

 

Its:          

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “A”

15

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “B”

 

 

[PURCHASE AND SALE AGREEMENT BETWEEN ALPHA ENERGY, INC. AND PROGRESSIVE WELL SERVICE, LLC IMMEDIATELY FOLLOWS THIS PAGE]

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “B”

16

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “C”

 

Notice of Conversion

 

Alpha Energy, Inc.

4162 Meyerwood Drive

Houston, Texas, 77025

 

 

_____________, 202_

 

_________________________________

_________________________________

_________________________________

_________________________________

 

Re: Partial Conversion of 7.25% Senior Secured Convertible Promissory Note with Alpha Energy, Inc.;

 

 

Please let this letter serve as notice of our intent to convert $_____________of the 7.25% Senior Secured Convertible Promissory Note listed below and 100% of the accrued and unpaid interest aggregating $____________ at __________. 202_ into a total of __________________ shares of the common stock of Alpha Energy, Inc. The shares are being converted at $5.00 per share per paragraph 6 (“Optional Conversion”) of the attached Convertible Promissory Note.

 

	
			Date of Revolver

				 	
			Principal

				 	 	
			Accrued Interest

				 	 	
			No. of Shares

				 
	 	 	$	 	 	 	$	 	 	 	 	 	 

 

 

The total monetary portion of the Note and accrued and unpaid interest to be converted to common stock shall be $_________, leaving a principle balance of $_________ and __ accrued and unpaid interest at _____________, 202_.

 

Please issue such shares and deliver them as set forth in the attached letter.

 

Thank you for your assistance in this matter.

 

Sincerely,

 

 

_____________________________                                                                        

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “C”

17

 

 

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “D”

 

	
			Logan 1 Project, Logan County, OK 

			Asset Purchase and Start-Up Budget

			
	
			Logan 1 Purchase

				 	 	600,000	 	 
	
			Leasing

				 	 	144,000	 	 
	
			Workover Program

				 	 	427,660	 	
			Reactivation and/or recompletion of 30 wells

			
	
			Geophysics

				 	 	100,000	 	 
	
			PUD Horizontal

				 	 	2,500,000	 	 
	
			Battlewagon (TX) Exploration Project

				 	 	200,000	 	
			Acquire rights and data

			
	
			Rayado (NM) Exploration Project

				 	 	95,000	 	
			Acquire rights and data

			
	
			Additional development or acquisition

				 	 	646,236	 	
			Drill Woodford well or transact on additional acquisition(s)

			
	
			Financing

				 	 	87,104	 	 
	
			Working Capital

				 	 	200,000	 	 
	
			Total

				 	$	5,000,000	 	 

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “D”

18

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “E”

 

 

[LOGAN 1 RESERVE REPORT EFFECTIVE OCTOBER 1ST, 2021 IMMEDIATELY FOLLOWS THIS PAGE]

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “E”

19

 

 

Alpha Energy, Inc

Senior Secured Convertible Promissory Note 

Exhibit “F”

Form of Mortgage Agreement

 

MORTGAGE, SECURITY AGREEMENT, 

FIXTURE FILING AND FINANCING STATEMENT

 

THIS MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (the “Mortgage”) is from Alpha Energy, Inc., a Colorado Corporation, as Mortgagor (the “Mortgagor”), to the Mortgagee (hereinafter defined). The addresses of the Mortgagor and the Mortgagee are set forth in Section 9.14 hereof. This Mortgage is dated ____________ 2022.

 

ARTICLE I

DEFINITIONS

 

1.1.    For all purposes of this Mortgage, unless the context otherwise requires:

 

“Accounts and Contract Rights” means all accounts (including accounts in the form of joint interest billings), contract rights and general intangibles of the Mortgagor now or hereafter existing, or hereafter acquired by, or on behalf of, the Mortgagor or the Mortgagor’s successors in interest, relating to the sale, purchase, exchange, extraction, transportation or processing of Hydrocarbons produced or to be produced from the Mortgaged Property, together with all accounts and proceeds accruing to the Mortgagor attributable to the sale of Hydrocarbons produced from the Mortgaged Property.

 

“As-Extracted Collateral” means Hydrocarbons which may be extracted from the Mortgaged Property, and the accounts relating thereto, which will be financed at the wellheads of the wells located on the Mortgaged Property and accounts arising out of the sale thereof.

 

“Borrower” means the Mortgagor.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Houston, Texas, are authorized or required by law to remain closed.

 

“Certificates of Ownership Interests” means the Certificates of Ownership Interests, if any, delivered by the Mortgagor in connection with the Credit Agreement.

 

“Code” means the Uniform Commercial Code as in effect in Colorado or, to the extent that the Laws of any jurisdiction wherein the affected Mortgaged Property is located or the Mortgagor was formed require the application of the Uniform Commercial Code adopted by such jurisdiction to an enforcement action against such Mortgaged Property, such other jurisdiction.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

20

 

 

“Credit Agreement” means the Senior Secured Convertible Promissory Note between the Borrower and various lenders dated _______ 2022, as it has been or may hereafter be amended, restated, supplemented or otherwise modified from time to time.

 

“Credit Parties” means each of the Lenders, and “Credit Party” means any of them.

 

“Debtor” has the meaning given such term in Section 9.13.1 hereof.

 

“Effective Date” means the date on which this Mortgage is executed.

 

“Event of Default” has the meaning stated in Article VII of this Mortgage.

 

“Exhibit A” means, unless specifically indicated otherwise, Exhibit A attached hereto.

 

“Governmental Authority” means any nation, country, commonwealth, territory, government, state, county, parish, municipality, or other political subdivision and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government.

 

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline and condensate and all other liquid or gaseous hydrocarbons.

 

“Lands” means the lands described in Exhibit A and in the mortgages and amendments to mortgage listed on Exhibit A and includes any lands, the description of which is contained in Exhibit A or incorporated in or referred to in Exhibit A by reference to another instrument or document, including, without limitation, all lands described in the Oil and Gas Leases, and also includes any lands now or hereafter unitized, pooled, spaced, or otherwise combined, whether by statute, order, agreement, declaration or otherwise, with lands the description of which is contained in Exhibit A or is incorporated in Exhibit A by reference.

 

“Lenders” means any party identified within the Contractual Investment Agreement.

 

“Loan Papers” or “Loan Documents” means the Notes, this Mortgage, the Credit Agreement and all other documents, instruments and agreements delivered to the Administrative Agent at any time in connection with the Credit Agreement (other than any Intercreditor Agreement), as any of the foregoing are amended, restated or supplemented, renewed or extended from time to time.

 

“Mortgaged Property” has the meaning stated in Article II of this Mortgage.

 

“Mortgagee” means the Lenders.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

21

 

 

“Net Revenue Interest” means Mortgagor’s share of the total production of oil, gas and other Hydrocarbons produced from the Lands, after deducting Mortgagor’s share of all lessors’ royalties, overriding royalties, production payments and other payments out of, or measured by, production.

 

“Notes” means the promissory note or notes identified in Section 3.1.1 of this Mortgage, and all renewals, extensions, replacements and modifications thereof.

 

“Oil and Gas Leases” means, collectively, oil, gas and mineral leases, oil and gas leases, oil leases, gas leases, other mineral leases, subleases and assignments of operating rights pertaining to any of the foregoing, and all other interests pertaining to any of the foregoing, including, without limitation, all royalty and overriding royalty interests, production payments and net profit interests, mineral fee interests, and all contingent reversionary and carried interests relating to any of the foregoing and all other rights therein, which are described or to which reference may be made on Exhibit A or in any document or instrument referred to in Exhibit A or which cover or relate to any of the Lands.

 

“Operating Equipment” means all personal property and fixtures pertaining, affixed or incidental to, situated upon or used or useful in connection with all or any part of the Mortgaged Property, including, without limitation, all surface or subsurface machinery, equipment, facilities, or other personal property of whatsoever kind or nature (but excluding drilling rigs, trucks, automotive equipment or other personal property taken to the premises to drill a well or for other similar temporary uses) now or hereafter located on any of the Lands which are useful for the production, treatment, storage, sale or transportation of oil or gas, including, but not by way of limitation, all oil wells, gas wells, water wells, injection wells, casing, tubing, rods, pumping units and engines, Christmas trees, derricks, separators, gun barrels, flow lines, tanks, gas systems, (for gathering, treating and compression), water systems (for treating, disposal and injection), power plants, poles, lines, transformers, starters and controllers, machine shops, tools, storage yards and equipment stored therein, buildings and camps, telegraph, telephone and other communication systems, roads, loading racks and shipping facilities.

 

“Person” means a natural person, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust or any other entity or organization, including a Governmental Authority.

 

“Proceeds” has the meaning given such term in Section 5.1 hereof.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

 

“Section” and “Article” mean and refer to a section or article of this Mortgage, unless specifically indicated otherwise.

 

“Secured Indebtedness” means all the indebtedness, obligations, and liabilities described or referred to in Section 3.1 of this Mortgage.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

22

 

 

“Secured Party” has the meaning given such term in Section 9.13.1 hereof.

 

“Subject Interests” has the meaning stated in Article II of this Mortgage.

 

“Well Data” means all logs, drilling reports, division orders, transfer orders, operating agreements, abstracts, title opinions, files, records, memoranda and other written or electronic information in the possession or control of the Mortgagor relating to any wells located on any of the Lands described in Exhibit A or in the mortgages and amendments to mortgage listed on Exhibit A.

 

1.2.    Other Defined Terms. The capitalized terms used herein have the meanings assigned to them in the Credit Agreement, unless they are otherwise defined herein or the context otherwise requires.

 

ARTICLE II

GRANTING CLAUSE - MORTGAGED PROPERTY

 

2.1.    The Mortgagor, for and in consideration of the premises and of the Secured Indebtedness hereinafter defined, has GRANTED, BARGAINED, SOLD, WARRANTED, MORTGAGED, PLEDGED, ASSIGNED, TRANSFERRED and CONVEYED, and by these presents does GRANT, BARGAIN, SELL, WARRANT, MORTGAGE, PLEDGE, ASSIGN, TRANSFER and CONVEY, unto the Mortgagee WITH POWER OF SALE with mortgage covenants, all the Mortgagor’s right, title and interest, whether now owned or hereafter acquired, in all of the hereinafter described properties, rights and interests; and, insofar as such properties, rights and interests consist of equipment, general intangibles, accounts, contract rights, inventory, fixtures, proceeds and products of collateral or any other personal property of a kind or character defined in or subject to the applicable provisions of the Code, the Mortgagor hereby grants to the Mortgagee a security interest therein, whether now owned or hereafter acquired, namely:

 

All of those certain Oil and Gas Leases, Lands, minerals, interests, and other properties (all such Oil and Gas Leases, Lands, interests and other properties being herein called the “Subject Interests”, as hereinafter further defined) which are described on Exhibit A or to which reference may be made on Exhibit A or which cover any of the Lands described on Exhibit A or which are located in or under any of the Lands described on Exhibit A or which are covered by any of the leases, assignments, mortgages, amendments to mortgage or other documents described on or referred to in Exhibit A or any document or instrument referred to in Exhibit A, which Exhibit A is made a part of this Mortgage for all purposes, and is incorporated herein by reference as fully as if copied at length in the body of this Mortgage at this point;

 

All rights, titles, interests, and estates now owned or hereafter acquired by the Mortgagor in and to (i) any and all properties now or hereafter pooled or unitized with any of the Subject Interests, and (ii) all presently existing or future unitization, communitization, and pooling agreements and the units created thereby which include all or any part of the Subject Interests, including, without limitation, all units formed under or pursuant to any Laws. The rights, titles, interests, and estates described in this Section 2.1.2 shall also be included within the term “Subject Interests” as used herein.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

23

 

 

All presently existing and future agreements hereafter entered into between the Mortgagor and any third party that provide for acquisition by the Mortgagor of any interest in any of the properties or interests specifically described in Exhibit A or in the mortgages and amendments to mortgage listed on Exhibit A or which relate to any of the properties and interests specifically described in Exhibit A or in the mortgages and amendments to mortgage listed on Exhibit A;

 

The Hydrocarbons (including inventory) which are in, under, upon, produced or to be produced from or attributable to the Lands or the Subject Interests;

 

The Accounts and Contract Rights;

 

The Operating Equipment;

 

The As-Extracted Collateral;

 

The Well Data;

 

The rights and security interests, if any, of the Mortgagor held by the Mortgagor to secure the obligation of the first purchaser to pay the purchase price of the Hydrocarbons;

 

All of Mortgagor’s right, title and interest in the oil wells and gas wells described on Exhibit A;

 

All surface leases, rights-of-way, franchises, easements, servitudes, licenses, privileges, tenements, hereditaments and appurtenances now existing or in the future obtained in connection with any of the aforesaid, and all other things of value and incident thereto which the Mortgagor may at any time have or be entitled to; and

 

All and any different and additional rights of any nature, of value or convenience in the enjoyment, development, operation or production, in any wise, of any Property or interest included in any of the foregoing clauses, and in all revenues, income, rents, issues, profits and other benefits arising therefrom or from any contract now in existence or hereafter entered into pertaining thereto, and in all rights and claims accrued or to accrue for the removal by anyone of oil and gas from, or other act causing damage to, any of such properties or interests;

 

all the aforesaid properties, rights and interests, together with any additions thereto which may be subjected to the lien of this Mortgage by means of supplements hereto, being hereinafter called the “Mortgaged Property”;

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

24

 

 

subject, however, to (i) the restrictions, exceptions, reservations, conditions, limitations, interests and other matters, if any, set forth or referred to in the specific descriptions of such properties and interests in Exhibit A or in the mortgages and amendments to mortgage listed on Exhibit A (including all presently existing royalties, overriding royalties, payments out of production and other burdens which are referred to in Exhibit A or in the mortgages and amendments to mortgage listed on Exhibit A and which are taken into consideration in computing the decimal or fractional interest as set forth in the Certificates of Ownership Interests); (ii) any operator’s lien arising by operation of applicable Law (or pursuant to the provisions of an operating agreement designating a Person other than the Mortgagor as operator) which has been perfected under applicable Law prior to the date of this Mortgage or of which the Mortgagee has constructive or actual notice as of the date hereof; (iii) the condition that the Mortgagee shall not be liable in any respect for the performance of any covenant or obligation of the Mortgagor with respect to the Mortgaged Property;

 

TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns, forever, to secure the payment of the Secured Indebtedness and to secure the performance of the obligations of the Mortgagor contained herein.

 

ARTICLE III

INDEBTEDNESS SECURED

 

3.1.    Notes and Secured Indebtedness. This Mortgage is given to secure the following indebtedness, obligations and liabilities:

 

The Loan Obligations, as evidenced in part by those certain SENIOR SECURED COVERTIBLE PROMISSORY NOTES (together with all renewals, increases, extensions, and modifications thereof and substitutions therefor) executed by the Borrower and payable to the order of the Lenders in the aggregate original principal amount of up to $5,000,000, which notes bear interest as provided therein including all obligations and indebtedness of the Borrower; Mortgagor, from time to time, but shall not be obligated to do so, and that all such additional sums and loans shall be part of the Secured Indebtedness).

 

3.2.    Final Maturity. Unless earlier payment is required by the terms of instruments secured by this Mortgage (including earlier payment as a result of the acceleration of payment of obligations secured by this Mortgage), the obligations secured by this Mortgage shall mature two years following the date of this Mortgage or, if such due date can be extended under applicable law without filing an amendment to this Mortgage, such later date as is specified (by amendment or otherwise) in such instruments.

 

ARTICLE IV

COVENANTS, REPRESENTATIONS, WARRANTIES AND

AGREEMENTS OF MORTGAGOR

 

The Mortgagor covenants, represents, warrants, and agrees that:

 

4.1.    Payment of Secured Indebtedness. The Mortgagor will duly and punctually pay or cause to be paid all of the Secured Indebtedness.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

25

 

 

4.2.    Warranties. (a) The Oil and Gas Leases either directly acquired from the operator, or to be acquired, are valid, subsisting leases, superior and paramount to all other oil and gas leases respecting the properties to which they pertain; (b) at the closing of the financing transaction, the Mortgagor represents that it will have closed and own an interest in the oil and gas leases and properties described in Exhibit A or in the mortgages, amendments to mortgage and other instruments described in Exhibit A and, to the extent of the interest specified in the Certificates of Ownership Interests, has valid and defensible title to each property right or interest constituting the Mortgaged Property and has a good and legal right to make the grant and conveyance made in this Mortgage, it being understood that the Mortgagor’s interest in each Oil and Gas Lease or Operating Equipment shall exceed Mortgagor’s Net Revenue Interest in production from such Oil and Gas Lease to the extent of the Mortgagor’s proportionate share of all royalties, overriding royalties, and other such payments out of production burdening the Mortgagor’s interest in each such Oil and Gas Lease; (c) the Mortgagor’s present Net Revenue Interest in the Mortgaged Property is not less than that specified in the Certificates of Ownership Interests; (d) the Mortgaged Property is free from all encumbrances or liens whatsoever, except as may be specifically set forth in Exhibit A or in the mortgages, amendments to mortgage and other instruments described in Exhibit A or as permitted by the provisions of Section 4.5.6; and (e) the Mortgagor is not obligated, by virtue of any deficiency presently existing under any contract providing for the sale by the Mortgagor of Hydrocarbons which contains a “take or pay” clause or under any similar arrangement, to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor. The Mortgagor will warrant and forever defend the Mortgaged Property unto the Mortgagee, its successors and assigns against every Person whomsoever lawfully claiming the same or any part thereof, and the Mortgagor will maintain and preserve the lien and security interest hereby created so long as any of the Secured Indebtedness remains unpaid.

 

4.3.    Further Assurances. The Mortgagor will execute and deliver such other and further instruments and will do such other and further acts as in the opinion of the Mortgagee may be necessary or desirable to carry out more effectively the purposes of this Mortgage.

 

4.4.    Taxes. Subject to the Mortgagor’s right to contest the same in good faith and by appropriate proceedings, the Mortgagor will promptly pay all taxes, assessments and governmental charges legally imposed upon this Mortgage or upon the Mortgaged Property or upon the interest of the Mortgagee therein, or upon the income, profits, proceeds and other revenues thereof; provided that, in the alternative, the Mortgagor may, in the event of the enactment of such a Law, and must, if it is unlawful for the Mortgagor to pay such taxes, prepay that portion of the Secured Indebtedness which the Mortgagee in good faith determines is secured by Property covered by such Law within 60 days after demand therefor by the Mortgagee.

 

4.5.    Operation of the Mortgaged Property. So long as the Secured Indebtedness or any part thereof remains unpaid, and whether or not the Mortgagor is the operator of the Mortgaged Property, the Mortgagor shall, at the Mortgagor’s own expense and subject to the terms of the Loan Papers:

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

26

 

 

Maintain, develop and operate the Subject Interests in a good and workmanlike manner and will observe and comply with all of the terms and provisions, express or implied, of the Oil and Gas Leases in order to keep the Oil and Gas Leases in full force and effect so long as the Oil and Gas Leases are capable of producing Hydrocarbons in commercial quantities;

 

Comply in all material respects with all contracts and agreements applicable to or relating to the Mortgaged Property or the production and sale of Hydrocarbons therefrom and all applicable proration and conservation Law of the jurisdictions in which the Mortgaged Property is located, and all applicable Law, rules and regulations of every agency and authority from time to time constituted to regulate the development and operation of the Mortgaged Property and the production and sale of Hydrocarbons therefrom;

 

Commence such development as may be reasonably necessary to the prudent and economical operation of the Mortgaged Property, including such work as may be appropriate to protect the Mortgaged Property from diminution in the production capacity thereof and against drainage of Hydrocarbons thereunder by reason of production on other Properties;

 

At all times, maintain, preserve and keep all Operating Equipment in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto, so that the efficiency of such Operating Equipment shall at all times be properly preserved and maintained, provided that no item of Operating Equipment need be so repaired, renewed, replaced, added to or improved, if the Mortgagor shall in good faith determine that such action is not necessary or desirable for the continued efficient and profitable operation of the business of the Mortgagor, and that the failure to take such action will not prejudice the interests of the Mortgagee;

 

Not abandon or cease developing, maintaining, operating and producing Hydrocarbons from, or cause or permit its agent to abandon, or cease developing, maintaining, operating, and producing Hydrocarbons from, any producing Mortgaged Property without first having undertaken and completed all reasonably prudent measures under the circumstances to restore such producing Mortgaged Property to economic production, and then only if the aggregate projected future ad valorem and severance taxes and operating expenses with respect to said Mortgaged Property exceed the projected future gross revenues attributable thereto;

 

Cause the Mortgaged Property to be kept free and clear of all liens, security interests, charges and encumbrances of every character, other than (i) Permitted Liens, and (ii) those hereafter consented to in writing by the Mortgagee; provided, that no intention to subordinate the first priority liens, security interests, and encumbrances granted in favor of the Mortgagee is hereby implied or expressed or is to be inferred by the permitted existence of the liens, security interests and encumbrances referred to in this Section 4.5.6 or elsewhere herein;

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

27

 

 

Maintain or cause to be maintained insurance with such insurers, in such amounts and covering such risks as is required by the Credit Agreement; and

 

Not sell, convey, trade, exchange, pool or unitize any portion of the Mortgaged Property or any of Mortgagor’s rights, titles, or interests therein or thereto, except as specifically provided otherwise herein;

 

provided, however, that with respect to Mortgaged Property which is operated by operators other than the Mortgagor or any of its Affiliates, the Mortgagor shall not be obligated itself to perform any undertakings contemplated by the covenants and agreements contained herein which are performable only by such operators and are beyond the control of the Mortgagor; and provided further, that the Mortgagor agrees to promptly take all actions available to the Mortgagor under any operating agreement or otherwise to bring about the performance of any such undertaking required to be performed by such operators.

 

4.6.    Recording. The Mortgagor will promptly and at the Mortgagor’s expense, record, register, deposit and file this Mortgage and every other instrument in addition or supplemental hereto in such offices and places and at such times and as often as may be necessary to preserve, protect and renew the lien and security interest hereof as a first lien and security interest on real or personal property, as the case may be, and the rights and remedies of the Mortgagee, and otherwise will do and perform all matters or things necessary or expedient to be done or observed by reason of any law or regulation of any state or of the United States or of any other competent authority, for the purpose of effectively creating, maintaining and preserving the lien and security interest hereof on the Mortgaged Property. In this connection and at the option of the Mortgagee but at the Mortgagor’s expense, the Mortgagee may record, register, deposit and file this Mortgage and supplements hereto.

 

4.7.    Records, Statements and Reports. The Mortgagor will keep proper books of record and account in which complete correct entries will be made of the Mortgagor’s transactions in accordance with sound accounting principles consistently applied and will furnish or cause to be furnished to the Mortgagee (a) all reports required under the Loan Papers, and (b) such other information concerning the business and affairs and financial condition of the Mortgagor as the Mortgagee may from time to time reasonably request.

 

4.8.    No Governmental Approvals. The Mortgagor warrants that no approval or consent of any regulatory or administrative commission or authority, or of any other governmental body, is necessary to authorize the execution and delivery of this instrument, or any of the other Loan Papers or the Notes, or to authorize the observance or performance by the Mortgagor of the covenants herein or therein contained.

 

4.9.    Right of Entry. The Mortgagor will permit the Mortgagee or its agents or designated representatives to enter upon the Mortgaged Property, and all parts thereof, for the purpose of investigating and inspecting the condition and operation thereof.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

28

 

 

4.10.    Flood Insurance Regulation. Notwithstanding any provision in this Mortgage to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) located on the Mortgaged Property within an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 included in the definition of “Mortgaged Property” and no Building or Manufactured (Mobile) Home is hereby encumbered by this Mortgage. As used herein, “Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, and (iv) the Flood Insurance Reform Act of 2004 and any regulations promulgated thereunder.

EVENTS OF DEFAULT

 

4.11.    Events of Default. An “Event of Default” is the occurrence of any one or more of the following which has not been waived:

 

Any Event of Default (as defined in the Credit Agreement) or Triggering Event (as defined in any effective Intercreditor Agreement) shall have occurred and the cure period, if any, with respect thereto shall have elapsed; or

 

The failure of any principal or interest on the Notes to be paid when due or to be paid at the maturity thereof, whether stated or by acceleration.

 

ARTICLE V

ENFORCEMENT OF THE SECURITY

 

5.1.    General Remedies. If an Event of Default exists which has not been waived by the Mortgagee, the Mortgagee may, at its sole option and discretion, subject to any mandatory requirements or limitations of Law then in force and applicable thereto:

 

Exercise all of the rights, remedies, powers and privileges of the Mortgagor with respect to the Mortgaged Property or any part thereof, give or withhold all consents required therein which the Mortgagor would otherwise be entitled to give or withhold, and perform or attempt to perform any covenants in this Mortgage which the Mortgagor is obligated to perform; provided that, no payment or performance by the Mortgagee shall constitute a waiver of any Event of Default, and the Mortgagee shall be subrogated to all rights and liens securing the payment of any debt, claim, tax, or assessment for the payment of which the Mortgagee may make an advance or pay;

 

Appoint as a matter of right, or seek the appointment of, a receiver or receivers to serve without bond for all or any part of the Mortgaged Property, whether such receivership be incident to a proposed sale thereof or otherwise, and the Mortgagor does hereby consent to the appointment of such receiver or receivers to serve without bond and does hereby agree not to oppose any application therefor by the Mortgagee and does hereby agree that there shall be no necessity of showing fraud, insolvency or mismanagement by the Mortgagor for the appointment of a receiver or receivers of the Mortgaged Properties;

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

29

 

 

Execute and deliver to such Person or Persons as may be designated by the Mortgagee appropriate powers of attorney to act for and on behalf of the Mortgagor in all transactions with any federal, state or local agency relating to any of the Mortgaged Property; and

 

Exercise any and all other rights or remedies granted to the Mortgagee pursuant to the provisions of any of the Loan Papers or by Law;

 

provided, that the Mortgagee shall have no obligation to do or refrain from doing any of the acts, or to make or refrain from making any payment, referred to in this Section 8.1. Any receiver or receivers of the Mortgaged Property, or any portion thereof, shall serve without bond.

 

5.2.    [Reserved]

 

5.3.    Judicial Proceedings; Receiver. This Mortgage shall be effective as a mortgage and may be foreclosed as to any of the Property covered hereby in any manner permitted by the Law of any state in which the affected Mortgaged Property is situated, and any foreclosure suit may be brought, to the extent permitted by Law, by the Mortgagee. Upon occurrence of an Event of Default which has not been waived by the Mortgagee, may proceed, where permitted by Law, by a suit or suits in equity or at law, whether for a foreclosure hereunder, or for the sale of the Mortgaged Property, or for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or without any showing of fraud, insolvency or mismanagement by the Mortgagor, for the appointment of a receiver or receivers of the Mortgaged Property and of the income, rents issues, products, profits and proceeds thereof (any such receiver or receivers to serve without bond) pending any foreclosure hereunder or the sale of the Mortgaged Property, or for the enforcement of any other appropriate legal or equitable remedy. The appointment of a receiver shall in no manner affect the rights of the Mortgagee under Article V hereof. If Mortgagee should institute a suit for the collection of the Secured Indebtedness, or for a foreclosure of the liens hereof, it may at any time before the entry of a final judgment in said suit dismiss the same, and, where permitted by Law sell the Mortgaged Property, or any part thereof, in accordance with the provisions of this Mortgage.

 

5.4.    Certain Aspects of a Sale. The Mortgagee shall have the right to become the purchaser at any sale of the Mortgaged Property to the extent not prohibited by Law, and the Mortgagee shall have the right to credit upon the amount of the bid made therefor, the amount payable out of the net proceeds of such sale to it. Recitals contained in any conveyance made to any purchaser at any sale made hereunder shall conclusively establish the truth and accuracy of the matters therein stated, including, without limiting the generality of the foregoing, nonpayment of the unpaid principal sum of, interest accrued on, and fees payable in respect of, the Secured Indebtedness after the same have become due and payable, and advertisement and conduct of such sale in the manner provided herein or applicable Law.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

30

 

 

5.5.    Receipt to Purchaser. Upon any sale the receipt of the Mortgagee, or of the officer making such sale under judicial proceedings, shall be sufficient discharge to the purchaser or purchasers at any sale for his or their purchase money, and such purchaser or purchasers, or his or their assigns or personal representatives, shall not, after paying such purchase money and receiving such receipt of the Mortgagee or of such officer therefor, be obligated to see to the application of such purchase money, or be in anywise answerable for any loss, misapplication or nonapplication thereof.

 

5.6.    Effect of Sale. Any sale or sales of the Mortgaged Property, where permitted by law, shall operate to divest all right, title, interest, claim and demand whatsoever either at law or in equity, of the Mortgagor of, in, and to the premises and the property sold, and shall be a perpetual bar, both at law and in equity, against the Mortgagor, and the Mortgagor’s successors or assigns, and against any and all persons claiming or who shall thereafter claim all or any of the property sold from, through, or under the Mortgagor, or the Mortgagor’s successors or assigns. Nevertheless, the Mortgagor, if requested by the Mortgagee to do so, shall join in the execution and delivery of all proper conveyances, assignments and transfers of the properties so sold.

 

5.7.    Application of Proceeds. The proceeds of any sale of the Mortgaged Property, or any part thereof shall be applied as follows (as appropriately modified to comply with any mandatory provisions of Law):

 

First: To the payment of all expenses incurred by the Mortgagee in the performance of its duties including, without limiting the generality of the foregoing, all expenses of any entry, or taking of possession, of any sale, of advertisement thereof, and of conveyances, and, as well, court costs, compensation of agents and employees and legal fees;

 

Second: To the payment and satisfaction of the Obligations (as defined in the Credit Agreement but without duplication of payments);

 

Third: To the payment and satisfaction of any other or additional amounts owed to the Lenders; and

 

Fourth: Any surplus thereafter remaining shall be paid to the Mortgagor or the Mortgagor’s successors or assigns, as their interests may appear of record, or as otherwise required by Law.

 

5.8.    Costs and Expenses. All costs, expenses (including attorneys’ fees), and payments incurred or made by the Mortgagee in protecting and enforcing its rights hereunder, shall constitute a demand obligation owing by the Mortgagor to the party incurring such or making costs, expenses, or payments and shall bear interest at the Default Rate or the rate per annum equal to the maximum rate of interest permitted by applicable Law, whichever is less, all of which shall constitute a portion of the Secured Indebtedness.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

31

 

 

5.9.    No Additional Duties Created. Notwithstanding any provision of this Article VIII or any other provision of this Mortgage, with respect to that portion of the Mortgaged Property located in any jurisdiction, the Mortgagee shall be entitled to enforce the rights and remedies described herein with respect to such portion of the Mortgaged Property in such jurisdiction in accordance with the Laws in effect in such jurisdiction at the time such enforcement action is taken, and the Mortgagor hereby waives its right to require the Mortgagee to comply with any contrary terms and provisions of this Mortgage in such circumstance, it being the intention of the Mortgagor and Mortgagee that the waivers of Mortgagor herein and the powers granted to the Mortgagee herein are for the sole benefit of the Mortgagee and are neither intended to limit the rights and powers of the Mortgagee as are permissible under applicable Law to enforce the Liens granted herein nor intended to establish a standard or duty of performance by the Mortgagee in excess of or in addition to that required by the Laws of such jurisdiction as in effect at the time the particular right or remedy is sought to be enforced. In furtherance thereof, with respect to that portion of the Mortgaged Property located in any jurisdiction, any actions by the Mortgagee to enforce the Liens granted herein which are not prohibited by the Law of such jurisdiction wherein the affected Mortgaged Property is located, shall be deemed to be in compliance with, and not prohibited by or in violation of, the terms of this Mortgage.

 

ARTICLE VI

MISCELLANEOUS

 

6.1.    Advances by the Mortgagee. Each and every covenant herein contained shall be performed and kept by the Mortgagor solely at the Mortgagor’s expense. If the Mortgagor shall fail to perform or keep any of the covenants of whatsoever kind or nature contained in this Mortgage, the Mortgagee or any receiver appointed hereunder, may, but shall not be obligated to, make advances to perform the same in the Mortgagor’s behalf, and the Mortgagor hereby agrees to repay such sums upon demand plus interest at a rate per annum equal to the maximum rate of interest permitted by applicable Law. No such advance shall be deemed to relieve the Mortgagor from any Event of Default hereunder.

 

6.2.    Defense of Claims. The Mortgagor will notify the Mortgagee, in writing, promptly of the commencement of any legal proceedings affecting or which could adversely affect the lien and security interest hereof or the status of or title to the Mortgaged Property, or any part thereof, and will take such action, employing attorneys agreeable to the Mortgagee, as may be necessary to preserve the Mortgagor’s and the Mortgagee’s rights affected thereby; and should the Mortgagor fail or refuse to take any such action, the Mortgagee may, but shall not be obligated to, take such action on behalf and in the name of the Mortgagor and at the Mortgagor’s expense. Moreover, the Mortgagee may, but shall not be obligated to, take such independent action in connection therewith as it may in its discretion deem proper without any liability or duty to the Mortgagor except to use ordinary care, the Mortgagor hereby agreeing that all sums advanced or all expenses incurred in such actions plus interest at the maximum rate of interest permitted by applicable Law, will, on demand, be reimbursed to the Mortgagee or any receiver appointed hereunder.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

32

 

 

6.3.    Other Security. The Mortgagee may take or may hold other security from Persons other than the Mortgagor for the Secured Indebtedness and may release or modify the same without notice to or consent of the Mortgagor. The Mortgagee may resort first to such other security or any part thereof or first to the security herein given or any part thereof, or from time to time to either or both, even to the partial or complete abandonment of either security, and such action shall not be a waiver of any rights conferred by this Mortgage, which shall continue as a first lien and security interest upon the Mortgaged Property not expressly released until all Secured Indebtedness secured hereby is fully paid and no Credit Party has any commitment to advance amounts or extend credit to or for the benefit of the Mortgagor or any other payor of Secured Indebtedness.

 

6.4.    Instrument an Assignment, Etc. This Mortgage shall be deemed to be and may be enforced from time to time as an assignment, chattel mortgage, contract, financing statement, real estate mortgage, pledge, or security agreement, and from time to time as any one or more thereof.

 

6.5.    Limitation on Interest. No provision of this Mortgage or of the other Loan Papers shall require the payment or permit the collection of interest, or be construed to create a contract regarding the same, in excess of the maximum rate permitted by Law or which is otherwise contrary to Law. If any excess of interest in such respect is herein or in the other Loan Papers provided for, or shall be adjudicated to be so provided for herein or in the other Loan Papers, such amount which would be deemed excessive interest shall be deemed a partial prepayment of the principal of the Secured Indebtedness and treated hereunder as such; and, if the entire principal amount of the Secured Indebtedness owed is paid in full, any remaining excess shall be repaid to the payors on the applicable Secured Indebtedness. In determining whether the interest paid or payable, under any specific contingency, exceeds the Highest Lawful Rate in effect from day to day, the Mortgagor and the holders of the Secured Indebtedness shall, to the maximum extent permitted under applicable Law, (i) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Secured Indebtedness so that the interest rate is uniform throughout the entire term of the Secured Indebtedness; provided that, if the interest received by the holders of the Secured Indebtedness for the actual period of existence thereof exceeds the Highest Lawful Rate in effect from day to day, the holders of the Secured Indebtedness shall apply or refund to the payors on the applicable Secured Indebtedness the amount of such excess as provided in this Section, and, in such event, the holders of the Secured Indebtedness shall not be subject to any penalties provided by any Laws for contracting for, charging, taking, reserving, or receiving interest in excess of the Highest Lawful Rate in effect from day to day.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

33

 

 

6.6.    Unenforceable or Inapplicable Provisions. The parties hereto have negotiated the terms of this Mortgage for its use or possible future use in more than one jurisdiction. Thus, if any provision of this Mortgage is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction, and such other provisions shall be liberally construed in favor of the Mortgagee in order to effectuate the provisions hereof, and the invalidity of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction. The parties hereby agree that to the extent any provision hereof is invalid or unenforceable in any jurisdiction, that this document will be deemed to contain a substitute provision, as similar as possible in intent and application to the invalid or unenforceable provision, that meets any statutory requirements in such jurisdiction required for the provision to be given effect. With respect to any jurisdiction wherein a portion of the Mortgaged Property is situated, any reference herein to a statute or the Law of another jurisdiction shall be deemed inapplicable to, and not used in, the interpretation of the duties, powers or authority of the Mortgagee under this Mortgage.

 

6.7.    Rights Cumulative. Each and every right, power and remedy herein given to the Mortgagee shall be cumulative and not exclusive; and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by the Mortgagee and the exercise, or the beginning of the exercise, of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter, any other right, power or remedy. No delay or omission by the Mortgagee in the exercise of any right, power or remedy shall impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

 

6.8.    Waiver of Covenants by Mortgagee. Any and all covenants in this Mortgage may from time to time by instrument in writing signed by the Mortgagee be waived to such extent and in such manner as the Mortgagee may desire, but no such waiver shall ever affect or impair the Mortgagee’s rights and remedies or liens and security interests hereunder, except to the extent specifically stated in such written instrument.

 

6.9.    Successors and Assigns.

 

This instrument is binding upon the Mortgagor, and the Mortgagor’s heirs, successors and assigns, and shall inure to the benefit of the Mortgagee, and its successors and assigns, and the provisions hereof shall likewise be covenants running with the Lands.

 

The parties hereto agree that the Notes may be transferred without the necessity for a notarial act of transfer thereof, and that any such transfer shall carry with it into the hands of any future holder or holders of the Notes full and entire subrogation of title in and to the Notes and to any and all rights and privileges under this instrument herein granted to the Mortgagee, as holder of the Notes. This Mortgage is for the benefit of the Mortgagee and for such other Person or Persons as may from time to time become or be the holders of any of the Secured Indebtedness, and this Mortgage shall be transferable and negotiable, with the same force and effect and to the same extent as the Secured Indebtedness may be transferable.

 

6.10.    Article and Section Headings. The article and section headings in this instrument are inserted for convenience and shall not be considered a part of this Mortgage or used in its interpretation.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

34

 

 

6.11.    Counterpart. This Mortgage may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original, and all of which are identical except that, to facilitate recordation in any particular county or parish, counterpart portions of Exhibit A which describe properties situated in parishes or counties other than the county or parish in which such counterpart is to be recorded may be omitted. Exhibit A might not be paginated and any pagination might not be consecutive. Exhibit A may also contain language indicating that it is attached to a document other than this Mortgage or that a particular page is the end of Exhibit A, when neither is applicable. Such language shall be ignored for the purposes of interpreting this Mortgage.

 

6.12.    Special Filing as Financing Statement.

 

This Mortgage shall likewise be a Security Agreement and a Financing Statement and Mortgagor, as debtor (the “Debtor”), hereby grants to the Mortgagee, its successors and assigns, as secured party (the “Secured Party”), a security interest in all personal property, fixtures, accounts, equipment, inventory, contract rights and general intangibles described or referred to in Article II hereof and all proceeds and products from the sale, lease or other disposition of the Mortgaged Property or any part thereof. The addresses shown in this Article hereof are the addresses of the Debtor and Secured Party and information concerning the security interest may be obtained from the Secured Party at its address. Without in any manner limiting the generality of any of the foregoing provisions hereof: (a) some portion of the goods described or to which reference is made herein are or are to become fixtures on the Lands described or to which reference is made herein; (b) the minerals and the like (including oil and gas) included in the Mortgaged Property and the accounts resulting from the sale thereof will be financed at the wellhead(s) or minehead(s) of the well(s) or mine(s) located on the Lands described or to which reference is made herein; and (c) this Mortgage is to be filed of record, among other places, in the real estate records of each county in which the Lands, or any part thereof, are situated, as a financing statement, but the failure to do so will not otherwise affect the validity or enforceability of this instrument.

 

The charter/file number of the Mortgagor is as set forth on the cover page hereof.

 

The Mortgagee is authorized to complete and file financing statements covering the security interests granted in this Mortgage. Any such financing statements may identify the property or collateral subject thereto as “all assets, ” “all property” or words of similar import.

 

6.13.    Notices. Whenever this Mortgage requires or permits any consent, approval, notice, request, or demand from one party to another, the consent, approval, notice, or demand must be in writing to be effective and shall be personally delivered or sent to the party to be notified at the address or facsimile number stated below (or such other address as may have been designated by written notice by the party pursuant to this Section):

 

	MORTGAGOR-DEBTOR	MORTGAGEE-SECURED PARTY
	 	 
	Alpha Energy, Inc.	 
	4162 Meyerwood Drive	 
	Houston, TX 77025	 
	Attn: John Lepin	Attn:

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

35

 

 

Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received (the receipt thereof shall be deemed to have been acknowledged upon the sending Person’s receipt of its facsimile machine’s confirmation of successful transmission; provided that if the day on which such facsimile is received is not a Business Day or is after 4:00 p.m. on a Business Day, then the receipt of such facsimile shall be deemed to have been acknowledged on the next following Business Day), (ii) if given by mail, three Business Days after such communication is deposited in the mail with first class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section.

 

6.14.    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 preclude the subsequent exercise thereof or the exercise of any other right or remedy.

 

6.15.    Governing Agreement. This Mortgage is made pursuant and subject to the terms and provisions of the Credit Agreement. In the event of a direct conflict between the terms and provisions of this Mortgage and those of the Credit Agreement, the terms and provisions of the Credit Agreement shall govern and control, except that if the two documents contain different formal definitions for the same term or terms, the formal definition of such term or terms herein shall be applicable in construing this Mortgage. The inclusion in this Mortgage 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. The indemnification and releases contained herein are in addition to any indemnification or releases contained in the Credit Agreement.

 

6.16.    Drafting of Mortgage. Mortgagor declares that it has contributed to the drafting of this Mortgage or has had the opportunity to have it reviewed by its counsel before signing it and agrees that it has been purposefully drawn and correctly reflects its understanding of the transaction that it contemplates.

 

6.17.    Execution by Mortgagee Corrections. The Mortgagee may at any time without obtaining the consent of the Mortgagor execute this Mortgage (and have such execution witnessed or acknowledged) for any purposes which it deems necessary or appropriate and, if deemed appropriate, subsequently file this Mortgage of record. Additionally, in the event it is determined that Exhibit A or the mortgages, amendments to mortgage or other instruments described in Exhibit A contain any errors or inaccurate or incomplete descriptions of the Oil and Gas Leases and Lands intended to be covered hereby or referred to in any Certificates of Ownership Interests, the Mortgagee may, without obtaining the consent of the Mortgagor, attempt to correct any such errors or omissions and make accurate and complete any such inaccuracies, omissions or misdescriptions and, if deemed appropriate, subsequently file or re-file this Mortgage of record.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

36

 

 

6.18.    Governing Law. This Mortgage is intended to be performed in the State of Colorado and the substantive Laws of such State and/or the United States of America shall govern the validity, construction, enforcement and interpretation of this Mortgage, unless otherwise specified herein, except that to the extent that the Laws of the state in which a portion of the Mortgaged Property is located (or that is otherwise applicable to a portion of the Mortgaged Property) necessarily or, in the sole discretion of Mortgagee, appropriately governs with respect to procedural and substantive matters relating to the creation, perfection and enforcement of the Liens and other rights and remedies of Mortgagee granted herein, the Laws of such state shall apply as to that portion of the Mortgaged Property located in (or otherwise subject to the Laws of) such state.

 

6.19.    Intercreditor Agreement. This Mortgage shall be deemed to be encompassed by the definition of “Security Instruments” as such term is defined and used in any Intercreditor Agreement which is in effect at the time a determination is being made.

 

6.20.    NOTICE: THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

IN WITNESS WHEREOF, the undersigned has executed or caused to be executed this Mortgage as of the date first set forth above.

 

	 	MORTGAGOR:	 
	 	 	 	 
	 	Alpha Energy, Inc.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Print:	John Lepin	 
	 	Title:	COB / Principal Financial Officer	 

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

37

 

 

ACKNOWLEDGEMENT

 

	STATE OF _____________	§
	 	§
	COUNTY OF _____________	§

 

This instrument was acknowledged before me on ______, 2022, by John Lepin, Chairman of the Board and Principal Financial Officer of Alpha Energy, Inc., a Colorado Corporation.

 

Before me, __________________, a Notary Public, on this day personally appeared John Lepin, Chairman of Board and Principal Financial Officer of Alpha Energy, Inc.,

 

☐ known to me

☐ proved to me on the oath of ______________________________

☐ proved to me through Texas Driver License No. ___________expiring _______         

☐ proved to me through ___________________________________________

 

to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed.

 

Given under my hand and seal of office this ___ day of _____, A.D., 2022.

 

	 	____________________________________Notary
	 	Public in and for the State of _____________
	 	 
	 	 
	 	Address of Notary Public:

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement

Notary Page - Mortgage, Security Agreement, Fixture Filing and Financing Statement (Oklahoma Oil and Gas Properties)

38

 

 

EXHIBIT “A”

TO MORTGAGE, SECURITY AGREEMENT,

 

FIXTURE FILING AND FINANCING STATEMENT

 

This Exhibit A sets forth the description of certain property interests covered by the Mortgage. All of the terms defined in the Mortgage are used in this Exhibit A with the same meanings given therein.

 

This Exhibit A and the Mortgage cover and include the following:

 

All right, title and interest, whether now owned and existing or hereafter acquired or arising, of Mortgagor in and to the oil, gas and mineral leases described herein or lands described in and subject to such oil, gas and mineral leases (regardless, as to such leases or lands, of any surface acreage or depth limitations set forth in any description of any of such oil, gas and mineral leases), and 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, if any, described on this Exhibit, 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 oil, gas and mineral leases or lands described herein; and

 

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, together with all interests, whether now owned and existing or hereafter acquired or arising, of Mortgagor in, to and under or derived from all renewals and extensions of any oil, gas and mineral leases described herein, it being specifically intended hereby that any new oil and gas lease (i) in which an interest is acquired by Mortgagor after the termination or expiration of any oil and gas lease, the interests of Mortgagor in, to and under or derived from which are subject to the lien and security interest hereof, and (ii) that covers all or any part of the property described in and covered by such terminated or expired leases, shall, to the extent, and only to the extent such new oil and gas lease may cover such property, be considered a renewal or extension of such terminated or expired lease; and

 

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 operating, farmout and bidding agreements, assignments and subleases, whether or not described in this Exhibit, to the extent, and only to the extent, that such agreements, assignments and subleases (i) cover or include any present right, title and interest of Mortgagor in and to the leases or lands described in this Exhibit, or (ii) cover or include any other undivided interests now or hereafter held by Mortgagor in, to and under the described leases or lands, including, without limitation, any future operating, farmout and bidding agreements, assignments, subleases and pooling, unitization and communitization agreements and the units created thereby (including, without limitation, all units formed under orders, regulations, rules or other official acts of any governmental body or agency having jurisdiction) to the extent and only to the extent that such agreements, assignments, subleases, or units cover or include the described leases or lands; and

 

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 on this Exhibit, to the extent, and only to the extent, those contracts and agreements cover or include the described leases or lands; and

 

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 described leases or lands.

 

Notwithstanding the intention of the Mortgage to cover all of the right, title and interest of Mortgagor in and to the described leases or lands, whether now owned and existing or hereafter acquired or arising, Mortgagor hereby specifically warrants and represents that the interests covered by this Exhibit 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 this Exhibit. In the event Mortgagor owns any other or greater interest, such additional interest shall also be covered by and included in the Mortgage.

 

Any reference herein to wells or units is for warranty of interest, administrative convenience and identification and is not intended to limit or restrict the right, title, interest of properties covered by the Mortgage and all of Mortgagor’s right, title and interest in the Lands, Subject Interests and Mortgaged Property described herein are and shall be subject to the Mortgage, regardless of the presence of any Units or Wells not herein referenced.

 

The Leases covered by the Mortgage includes all leases and force pooled interests now or thereafter owned by Mortgagor included within the counties referred to in this Exhibit whether or not the schedules of leases included in this Exhibit list all such leases.

 

No depth limitation exception contained in any description of leases and other real property interests set forth in this Exhibit shall exclude from the grants of the Mortgaged Property and collateral contained in the Mortgage any depth owned by Mortgagor within the geographic area described in this Exhibit for such leases and other real property interests.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

39

 

 

The designation “Working Interest” or “W.I.” 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 “N.R.I.” 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 “RI” 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.

 

The references to book or volume and page herein refer to the recording location of each respective Mortgaged Property described herein in the county/parish where the land covered by the Mortgaged Property is located.

 

This Mortgage covers all lands, leases and properties of the Mortgagor, whether now owned or hereafter acquired, located in any county/parish identified elsewhere in this Exhibit or located in any county/parish wherein this Mortgage has been recorded, other than any mobile home and any property excluded from the scope of this Mortgage by virtue of Section 4.10 hereof.

 

[Exhibit A continues on the following page(s)]

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

40

 

 

EXHIBIT “A” – Logan County, Oklahoma

 

Part 1

 

(LEASES, WELLS AND PRODUCTION THEREFROM)

 

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT BY AND BETWEEN PROGRESSIVE WELL SERVICE, LLC, AS SELLER, AND ALPHA ENERGY, INC., AS PURCHASER, DATED THE xxxxxxxxxxxx 

 

SCHEDULE I- (LEASES) & (WELLBORES):         

 

SE/4 OF SECTION 2-T17N-R3W

 

Wellbores

 

CORAL #2-4; API #083-23696

 

SE/4 NW/4 SW/4 SE/4 (927' FSL and 543' FWL) of the drilling and spacing unit comprised of the W/2 SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-19; API #083-23812

 

C N/2 NW/4 SE/4 (330' FNL and 660' FWL) of the drilling and spacing unit comprised of the W/2 SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-9; API #083-23713

 

C SE/4 SE/4 (660' FSL and 660' FEL) of the drilling and spacing unit comprised of the E/2 SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-24; API #083-23797A

 

E/2 NW/4 NE/4 SE/4 (330' FSL and 620' FWL) of the drilling and spacing unit comprised of the E/2 SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				May 12, 2003
	
			Filed:

				
			May 20, 2003

			
	
			Recorded:

				
			Book 1720, Page 694

			
	
			Lessors:

				
			Bennie Ray, a widower

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			April 28, 2003

			
	
			Filed:

				
			June 26, 2003

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

41

 

 

	
			Recorded:

				
			Book 1728, Page 154

			
	
			Lessors:

				
			Morris Ruby

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4, Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			April 14, 2003

			
	
			Filed:

				
			June 26, 2003

			
	
			Recorded:

				
			Book 1728, Page 156

			
	
			Lessors:

				
			Grace Olesen

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			SE/4 Section 2-T17N-R3W

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 183

			
	
			Lessors:

				
			Dorothy Berschman, heir of Lester Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 185

			
	
			Lessors:

				
			Lois Campbell, sole heir of Nell Carson, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 187

			
	
			Lessors:

				
			Betty Johnson, heir of Lester Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 189

			
	
			Lessors:

				
			Ocella M. Ruby, a widow

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 191

			
	
			Lessors:

				
			Audrey Obbink, heir of Orville H. Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

42

 

 

	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 14, 2003

			
	
			Recorded:

				
			Book 1732, Page 193

			
	
			Lessors:

				
			Delores D. Rinden, heir of Lester Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 28, 2003

			
	
			Recorded:

				
			Book 1734, Page 666

			
	
			Lessors:

				
			Gerald L. Ruby, heir of Elmer I. Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 28, 2003

			
	
			Recorded:

				
			Book 1734, Page 668

			
	
			Lessors:

				
			Robert Ruby, heir of Orville H. Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			July 28, 2003

			
	
			Recorded:

				
			Book 1734, Page 670

			
	
			Lessors:

				
			Arlene Kockler, heir of Orville H. Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				July 1, 2003
	
			Filed:

				
			August 8, 2003

			
	
			Recorded:

				
			Book 1738, Page 172

			
	
			Lessors:

				
			James Ruby, heir of Lester J. Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				August 6, 2003
	
			Filed:

				
			August 26, 2003

			
	
			Recorded:

				
			Book 1741, Page 607

			
	
			Lessors:

				
			Marcella Morgan, a widow

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				August 6, 2003
	
			Filed:

				
			August 26, 2003

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

43

 

 

	
			Recorded:

				
			Book 1741, Page 608

			
	
			Lessors:

				
			Norma Dyson, Attorney in Fact for Violet Opal Chism

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				August 6, 2003
	
			Filed:

				
			August 26, 2003

			
	
			Recorded:

				
			Book 1741, Page 610

			
	
			Lessors:

				
			Darrell Wood, sole heir of Blanche and Donald Wood, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				August 6, 2003
	
			Filed:

				
			August 26, 2003

			
	
			Recorded:

				
			Book 1741, Page 612

			
	
			Lessors:

				
			Cecil P. Morgan and Marion Morgan, his wife

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				August 11, 2003
	
			Filed:

				
			December 2, 2003

			
	
			Recorded:

				
			Book 1762, Page 424

			
	
			Lessors:

				
			Rick Ruby, heir of Kenneth Ruby, Deceased

			
	
			Lessee:

				William W. London, Inc.
	
			Description:

				
			SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			

 

 

SW/4 OF SECTION 2-T17N-R3W

 

Wellbores

 

CORAL #2-2; API #083-23673A

 

W/2 SE/4 SE/4 SW/4 (330' FSL and 505' FEL) of the drilling and spacing unit comprised of the E/2 SW/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-3; API #083-23666 

 

NE/4 SW/4 NE/4 SW/4 (950' FNL and 770' FEL) of the drilling and spacing unit comprised of the E/2 SW/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-20; API #083-23810

 

NE/4 SE/4 SW/4 SW/4 (382' FSL and 222' FEL) of the drilling and spacing unit comprised of the W/2 SE/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

CORAL #2-28; API #083-23868

 

SE/4 SW/4 NW/4 SW/4 (1206' FNL and 575' FWL) of the drilling and spacing unit comprised of the W/2 SW/4 of Section 2-T17N-R3W, Logan County, Oklahoma

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

44

 

 

Lease Interests

 

	
			Dated:

				November 26, 2002
	
			Filed:

				
			December 31, 2002

			
	
			Recorded:

				
			Book 1693, Page 454

			
	
			Lessors:

				
			Doris Earline Dunn

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			November 26, 2002

			
	
			Filed:

				
			December 31, 2002

			
	
			Recorded:

				
			Book 1693, Page 456

			
	
			Lessors:

				
			Pauline Graff, a married woman

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4, Section 2-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			November 26, 2002

			
	
			Filed:

				
			January 14, 2003

			
	
			Recorded:

				
			Book 1696, Page 104

			
	
			Lessors:

				
			Norma Lee Lambert

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			SW/4 Section 2-T17N-R3W

			

 

 

NE/4 OF SECTION 11-T17N-R3W

 

Wellbores

 

CORAL #11-6; API #083-23707

 

NW/4 NE/4 (660' FNL and 660' FWL) of the drilling and spacing unit comprised of the NW/4 of Section 11-17N-R3W, Logan County, Oklahoma.

 

CORAL #11-18; API #083-23799

 

NE/4 SW/4 SW/4 NE/4 (568' FSL and 357' FWL) of the drilling and spacing unit comprised of the NW/4 of Section 11-17N-R3W, Logan County, Oklahoma.

 

CORAL #11-21; API #083-23817

 

SW/4 SW/4 SE/4 NE/4 (260' FSL and 1490' FWL) of the drilling and spacing unit comprised of the NE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

CORAL #11-23; API #083-23835

 

SE/4 NW/4 NE/4 NE/4 (489' FNL and 931' FEL) of the drilling and spacing unit comprised of the NE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

45

 

 

Lease Interests

 

	
			Dated:

				
			October 1, 2003

			
	
			Filed:

				
			November 10, 2003

			
	
			Recorded:

				
			Book 1758, Page 137

			
	
			Lessor:

				
			Lou Emily Banks

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				October 1, 2003
	
			Filed:

				November 10, 2003
	
			Recorded:

				
			Book 1758, Page 139

			
	
			Lessor:

				
			Charles Howard Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 3, 2003

			
	
			Filed:

				November 10, 2003
	
			Recorded:

				
			Book 1758, Page 141

			
	
			Lessor:

				
			Joann Gooch, Trustee of the Joann Gooch Revocable Trust dated 6/29/89

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 13, 2003

			
	
			Filed:

				
			November 10, 2003

			
	
			Recorded:

				
			Book 1758, Page 143

			
	
			Lessor:

				
			William K. Garvey, M.D.

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 20, 2003

			
	
			Filed:

				
			November 10, 2003

			
	
			Recorded:

				
			Book 1758, Page 145

			
	
			Lessor:

				
			Anna M. McClelland a/k/a Ann M. McClelland

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

46

 

 

	
			Dated:

				
			October 21, 2003

			
	
			Filed:

				
			November 10, 2003

			
	
			Recorded:

				
			Book 1758, Page 147

			
	
			Lessor:

				
			Eugene J. McGarvey, Jr.

			
	
			Lessee:

				Easton Enterprises, Inc.
	 	 
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	
			Dated:

				
			October 24, 2003

			
	
			Filed:

				
			November 10, 2003

			
	
			Recorded:

				
			Book 1758, Page 149

			
	
			Lessor:

				
			A.F. Ringold, Trustee of the Cecile Wagner Revocable Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 1, 2003

			
	
			Filed:

				
			November 21, 2003

			
	
			Recorded:

				
			Book 1760, Page 624

			
	
			Lessor:

				
			Edd Eugene Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 10, 2003

			
	
			Filed:

				
			November 21, 2003

			
	
			Recorded:

				
			Book 1760, Page 626

			
	
			Lessor:

				
			Glenn D. Gooch and wife, Alta Fay Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 1, 2003

			
	
			Filed:

				
			November 21, 2003

			
	
			Recorded:

				
			Book 1760, Page 628

			
	
			Lessor:

				
			Norval R. Gooch and Etta Dusa Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 29, 2003

			
	
			Filed:

				
			January 5, 2004

			
	
			Recorded:

				
			Book 1768, Page 221

			
	
			Lessor:

				
			Virginia L. Steele, a widow

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 23, 2003

			
	
			Filed:

				
			January 5, 2004

			
	
			Recorded:

				
			Book 1768, Page 223

			
	
			Lessor:

				
			Vaughn Daniel Yeager

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

47

 

 

	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 3, 2003

			
	
			Filed:

				
			January 5, 2004

			
	
			Recorded:

				
			Book 1768, Page 225

			
	
			Lessor:

				
			Eva M. Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 15, 2003

			
	
			Filed:

				
			January 13, 2004

			
	
			Recorded:

				
			Book 1770, Page 253

			
	
			Lessor:

				
			Robert G. Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

48

 

 

 

	
			Dated:

				
			October 30, 2003

			
	
			Filed:

				
			January 13, 2004

			
	
			Recorded:

				
			Book 1770, Page 259

			
	
			Lessor:

				
			Patricia Moran Henthorne and Bank of Oklahoma, N.A., Co-Trustees of the Walter B. Moran Trust "C"

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	 	 
	
			Dated:

				
			February 4, 2004

			
	
			Filed:

				
			February 3, 2004

			
	
			Recorded:

				
			Book 1778, Page 442

			
	
			Lessor:

				
			J.E. and L.E. Mabee Foundation, Inc.

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 18, 2004

			
	
			Filed:

				
			March 24, 2004

			
	
			Recorded:

				
			Book 1782, Page 434

			
	
			Lessor:

				
			H&B Production, Inc.

			
	
			Lessee:

				S.G. Williamson, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 4, 2004

			
	
			Filed:

				
			March 25, 2004

			
	
			Recorded:

				
			Book 1782, Page 555

			
	
			Lessor:

				
			Marjo Morrison Hubbell

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				March 19, 2004
	
			Filed:

				April 5, 2004
	
			Recorded:

				
			Book 1784, Page 490

			
	
			Lessor:

				
			Richard J. Morrison Family Limited Partnership

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 5, 2004

			
	
			Filed:

				
			October 5, 2004

			
	
			Recorded:

				
			Book 1818, Page 465

			
	
			Lessor:

				
			Carol Glee Nelson

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 5, 2004

			
	
			Filed:

				
			October 5, 2004

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

49

 

 

	
			Recorded:

				
			Book 1818, Page 467

			
	
			Lessor:

				
			Carol Glee Nelson, in Trust, as Trustee of the Margie G. Gooch Testamentary Trust for the use and benefit of Lloyd Donald Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				April 1, 2005
	
			Filed:

				May 6, 2005
	
			Recorded:

				
			Book 1855, Page 44

			
	
			Lessor:

				
			David L. Kundysek d/b/a Southwest Petroleum Company

			
	
			Lessee:

				Parameno Resources, Ltd., a Texas limited partnership
	
			Description:

				
			NE/4 of Section 11-T17N-R3W

			

 

 

Force Pooled Interest acquired pursuant to OCC Pooling Order No. 488052 dated March 31, 2004, entered in Cause CD No. 200401634, ‐the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the NE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

Force Pooled Interest acquired pursuant to OCC Pooling Order No. 490411 dated May 24, 2004, entered in Cause CD No. 200403059, ‐the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the NE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

SW/4 OF SECTION 11-T17N-R3W

Wellbores

 

CORAL #11-16; API #083-23831

 

W/2 E/2 NE/4 SW/4 (660’ FNL and 560’ FEL) of the drilling and spacing unit comprised of the E/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #22-11; API #083-23867

 

NW/4 SW/4 NW/4 SW/4 (760' FNL and 300' FWL) of the drilling and spacing unit comprised of the W/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-33; API #083-23909A

 

W/2 E/2 SE/4 SW/4 (660’ FSL and 2235' FWL) of the drilling and spacing unit comprised of the E/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			February 20, 2004

			
	
			Filed:

				March 1, 2004
	
			Recorded:

				
			Book 1779, Page 728

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

50

 

 

	
			Lessor:

				
			Robert L. Prince, a married person dealing in his separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			April 9, 2004

			
	
			Filed:

				May 7, 2004
	
			Recorded:

				
			Book 1790, Page 531

			
	
			Lessor:

				
			Ralph E. Faucett, 2363 Crescent Drive, San Diego, CA  92130-1011

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 5, 2004

			
	
			Filed:

				
			October 14, 2004

			
	
			Recorded:

				
			Book 1820, Page 130

			
	
			Lessor:

				
			A.F. Ringold, Trustee of the Cecile Wagner Revocable Trust dtd 11/29/90

			
	
			Lessee:

				Elson Oil, L.L.C.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 6, 2004

			
	
			Filed:

				
			October 15, 2004

			
	
			Recorded:

				
			Book 1820, Page 334

			
	
			Lessor:

				
			Julia D. Taylor, Trustee of the Taylor Family Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 6, 2004

			
	
			Filed:

				
			October 15, 2004

			
	
			Recorded:

				
			Book 1820, Page 336

			
	
			Lessor:

				
			Julia D. Taylor, a person dealing in her own and personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 6, 2004

			
	
			Filed:

				
			October 15, 2004

			
	
			Recorded:

				
			Book 1820, Page 338

			
	
			Lessor:

				
			Kenneth D. Mitchell and Jane E. Mitchell, Co-Trustees of the Kenneth D. Mitchell Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			October 18, 2005

			
	
			Recorded:

				
			Book 1887, Page 6

			
	
			Lessor:

				
			H. Charles Snowden, a married person dealing in his sole and separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

51

 

 

	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			October 18, 2005

			
	
			Recorded:

				
			Book 1887, Page 6

			
	
			Lessor:

				
			Vaughn Daniel Yeager, a married person dealing in his sole and separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			October 18, 2005

			
	
			Recorded:

				
			Book 1887, Page 10

			
	
			Lessor:

				
			Charles D. Morrison and Beth Blubaugh Morrison, Co-Trustees of the Charles D. Morrison Revocable Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			November 23, 2005

			
	
			Recorded:

				
			Book 1893, Page 237

			
	
			Lessor:

				
			Estate of Richard W. Haley, Deceased, Catherine F. Haley, Executrix and/or Catherine F. Haley, an individual dealing in her own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			November 23, 2005

			
	
			Recorded:

				
			Book 1893, Page 239

			
	
			Lessor:

				
			Victor K. Blackburn, a married person dealing in his own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 26

			
	
			Lessor:

				
			William K. McGarvey, dealing in his own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 28

			
	
			Lessor:

				
			Jean Haley Griffin, Trustee of the Jean Haley Griffin Family Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 15, 2005

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

52

 

 

	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 30

			
	
			Lessor:

				
			Margaret Ford Storey, a woman dealing in her personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 32

			
	
			Lessor:

				
			Eugene J. McGarvey, dealing in his own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 34

			
	
			Lessor:

				
			Ann M. McClelland, a married person dealing in own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 15, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 36

			
	
			Lessor:

				
			William M. Blackburn, dealing in own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 14, 2005

			
	
			Filed:

				
			December 22, 2005

			
	
			Recorded:

				
			Book 1898, Page 38

			
	
			Lessor:

				
			Jacquelyn S. Crisp, a lady dealing in her own personal property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			February 4, 2006

			
	
			Filed:

				
			February 27, 2006

			
	
			Recorded:

				
			Book 1909, Page 273

			
	
			Lessor:

				
			Ellis Rudy, Ltd.

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 3, 2006

			
	
			Filed:

				
			March 21, 2006

			
	
			Recorded:

				
			Book 1914, Page 55

			
	
			Lessor:

				
			Madison Energy, Inc.

			
	
			Lessee:

				Easton Enterprises, Inc.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

53

 

 

	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 3, 2006

			
	
			Filed:

				
			March 21, 2006

			
	
			Recorded:

				
			Book 1914, Page 58

			
	
			Lessor:

				
			Knapp Oil Corporation

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 9, 2006

			
	
			Filed:

				
			April 4, 2006

			
	
			Recorded:

				
			Book 1918, Page 156

			
	
			Lessor:

				
			OConnor Royalty, Inc.

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 21, 2006

			
	
			Filed:

				
			April 4, 2006

			
	
			Recorded:

				
			Book 1918, Page 159

			
	
			Lessor:

				
			Edward C. Hastings

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			March 29, 2006

			
	
			Filed:

				
			April 4, 2006

			
	
			Recorded:

				
			Book 1918, Page 161

			
	
			Lessor:

				
			Olsen Oils, Inc.

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			January 18, 2006

			
	
			Filed:

				
			April 11, 2006

			
	
			Recorded:

				
			Book 1919, Page 524

			
	
			Lessor:

				
			Patricia Moran Henthorne and Bank of Oklahoma, Trustees of the Walter B. Moran Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 1, 2006

			
	
			Filed:

				
			May 16, 2006

			
	
			Recorded:

				
			Book 1927, Page 532

			
	
			Lessor:

				
			Kevin Powers, a married person dealing in his separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 1, 2006

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

54

 

 

	
			Filed:

				
			May 16, 2006

			
	
			Recorded:

				
			Book 1928, Page 538

			
	
			Lessor:

				
			Colleen Jackson, a married woman dealing in her separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 1, 2006

			
	
			Filed:

				
			May 16, 2006

			
	
			Recorded:

				
			Book 1928, Page 542

			
	
			Lessor:

				
			Charles Kiley, a married man dealing in his separate property  

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 2, 2006

			
	
			Filed:

				
			May 16, 2006

			
	
			Recorded:

				
			Book 1928, Page 544

			
	
			Lessor:

				
			Patricia Phillips, a married woman dealing in her separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			June 12, 2006

			
	
			Filed:

				
			June 13, 2006

			
	
			Recorded:

				
			Book 1933,Page 551

			
	
			Lessor:

				
			Jerry L. Logan, Trustee of the Jerry Lynn Logan 2000 Revocable Trust dated 2/7/00 and JoAnn Logan, Trustee of the JoAnn Logan Revocable Trust dated 2/7/00

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 1, 2006

			
	
			Filed:

				
			August 29, 2006

			
	
			Recorded:

				
			Book 1948, Page 200

			
	
			Lessor:

				
			Janemarie Powers, a single person

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			E/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			August 20, 2007

			
	
			Filed:

				
			December 29, 2007

			
	
			Effective:

				
			As of date of first production from the Coral No. 11-16 well

			
	
			Recorded:

				
			Book 2039, Page 634

			
	
			Lessor:

				
			Steve Hoffman

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			May 2, 2007

			
	
			Filed:

				
			June 27, 2007

			
	
			Recorded:

				
			Book 2005, Page 616

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

55

 

 

	
			Lessor:

				
			The Land Department, Inc., 8006 S. Quebec, Tulsa, OK  74136

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			W/2 SW/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			July 20, 2007

			
	
			Filed:

				
			August 15, 2007

			
	
			Recorded:

				
			Book 2016, Page 443

			
	
			Lessor:

				
			Madison Energy, Inc., P.O. Box 1448, Sidney, MT  59270

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			W/2 SW/4 of Section 11-T17N-R3W

			
	
			Dated:

				
			July 26, 2007

			
	
			Filed:

				
			August 15, 2007

			
	
			Recorded:

				
			Book 2016, Page 454

			
	
			Lessor:

				
			Jerry L. Logan, Trustee of the Jerry Lynn Logan 2000 Revocable Trust dated 2/7/00 and JoAnn Logan, Trustee of the JoAnn Logan 2000 Revocable Trust dated 2/7/00

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			W/2 SW/4 of Section 11-T17N-R3W

			

 

 

Force pooled interest acquired pursuant to OCC Pooling Order No. 522276 dated March 28, 2006, entered in Cause CD No. 200601930, ‐as extended by Emergency Order No. 529915 dated September 20, 2006, as extended by Order No. 530594 dated October 5, 2006, which extended the time for the commencement of operations until November 24, 2006, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the NE/4 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Covington, Middle Layton Sand, Layton (less Middle Layton), Misener, First Wilcox, Marshall and Second Wilcox; and E/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Oswego, Red Fork, Mississippi Lime, Hunton and Viola Dolomite common sources of supply; and the SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Upper Hoover, Carmichael Sand, Tonkawa and Avant common sources of supply.

 

Force pooled interest acquired pursuant to Order No. 527965, dated August 1, 2006, extended by Order No. 534173 dated January 11, 2007, as corrected by Order Nunc Pro Tunc 534697 dated January 25, 2007, as extended by Order No. 542296 dated January 26, 2007, entered in Cause CD No. 200605590, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the SW/4 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Covington, Middle Layton Sand, Layton (less Middle Layton), Misener, First Wilcox, Marshall and Second Wilcox; and W/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Oswego, Red Fork, Mississippi Lime, Hunton and Viola Dolomite common sources of supply.

 

Force pooled interest acquired pursuant to Order No. 546591 dated November 14, 2007, entered in Cause CD No. 200707039, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the NW/4 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Covington, Middle Layton Sand, Layton (less Middle Layton), Misener, First Wilcox, Marshall and Second Wilcox common sources of supply.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

56

 

 

Force pooled interest acquired pursuant to Order No. 546766 dated November 19, 2007, entered in Cause CD No. 200707040, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the NW/4 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Covington, Middle Layton Sand, Layton (less Middle Layton), Misener, First Wilcox, Marshall and Second Wilcox; and W/2 SW/4 of Section 11-T17N-R3W, Logan County, Oklahoma, as to the Oswego, Red Fork, Mississippi Lime, Hunton and Viola Dolomite common sources of supply.

 

SE/4 OF SECTION 11-T17N-R3W

Wellbores

 

CORAL #11-14; API #083-23796

 

E/2 W/2 NW/4 SE/4 (1980’ FSL and 550’ FWL) of the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

CORAL #11-26; API #083-23842A

 

E/2 W/2 NE/4 SE/4 (660' FNL and 860' FEL) of the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-32; API #083-23904

 

SW/4 NE/4 SW/4 SE/4 (713' FSL and 1757' FEL) of the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-34; API #083-23882

 

NW/4 SE/4 SE/4 SE/4 (652' FSL and 574' FEL) of the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			May 27, 2004

			
	
			Filed:

				
			June 10, 2004

			
	
			Recorded:

				
			Book 1797, Page 106

			
	
			Lessor:

				
			Virginia L. Steele, a widow

			
	
			Lessee:

				S.G. Williamson, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			October 4, 2004

			
	
			Filed:

				
			October 14, 2004

			
	
			Recorded:

				
			Book 1820, Page 132

			
	
			Lessor:

				
			A.F. Ringold, Trustee of the Cecile Wagner Revocable Trust dated 11/29/90

			
	
			Lessee:

				Elson Oil, L.L.C.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

57

 

 

	
			Dated:

				
			September 21, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 320

			
	
			Lessor:

				
			Eugene J. McGarvey, Jr.

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 21, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 321

			
	
			Lessor:

				
			Anna M. McClelland a/k/a Ann M. McClelland

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 10, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 322

			
	
			Lessor:

				
			H&B Production, Inc.

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 21, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 323

			
	
			Lessor:

				
			William K. McGarvey, M.D.

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 21, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 324

			
	
			Lessor:

				
			Vaughn Daniel Yeager

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 20, 2004

			
	
			Filed:

				
			November 30, 2004

			
	
			Recorded:

				
			Book 1827, Page 281

			
	
			Lessor:

				
			J.E. and L.E. Mabee Foundation, Inc.

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 3, 2004

			
	
			Filed:

				
			December 7, 2004

			
	
			Recorded:

				
			Book 1828, Page 673

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

58

 

 

	
			Lessor:

				
			Charles Howard Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 3, 2004

			
	
			Filed:

				
			December 7, 2004

			
	
			Recorded:

				
			Book 1828, Page 675

			
	
			Lessor:

				
			Edd Eugene Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 3, 2004

			
	
			Filed:

				
			December 28, 2004

			
	
			Recorded:

				
			Book 1832, Page 505

			
	
			Lessor:

				
			JoAnn Gooch, Trustee of the JoAnn Gooch Revocable Trust dated 6/26/89

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 3, 2004

			
	
			Filed:

				
			December 28, 2004

			
	
			Recorded:

				
			Book 1832, Page 507

			
	
			Lessor:

				
			Glenn D. Gooch and wife, Alta Faye Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 16, 2004

			
	
			Filed:

				
			December 28, 2004

			
	
			Recorded:

				
			Book 1832, Page 509

			
	
			Lessor:

				
			Robert G. Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 16, 2004

			
	
			Filed:

				
			December 28, 2004

			
	
			Recorded:

				
			Book 1832, Page 511

			
	
			Lessor:

				
			Carol Glee Nelson

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			November 3, 2004

			
	
			Filed:

				
			December 28, 2004

			
	
			Recorded:

				
			Book 1832, Page 513

			
	
			Lessor:

				
			Norval R. Gooch and wife, Etta Dusa Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

59

 

 

	
			Dated:

				
			November 24, 2004

			
	
			Filed:

				
			January 4, 2005

			
	
			Recorded:

				
			Book 1833, Page 575

			
	
			Lessor:

				
			Allison Glee Roggow

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				December 9, 2004
	
			Filed:

				
			January 21, 2005

			
	
			Recorded:

				
			Book 1836, Page 359

			
	
			Lessor:

				
			Richard J. Morrison, a general partner of the Richard J. Morrison Family Limited Partnership and as attorney in fact for Marjo Hubbell

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			September 10, 2004

			
	
			Filed:

				
			January 21, 2005

			
	
			Recorded:

				
			Book 1836, Page 360

			
	
			Lessor:

				
			James Robert Banks, individually and as Executor of the Estate of Lou Emily Banks, Deceased

			
	
			Lessee:

				R.E. Blaik, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			January 5, 2005

			
	
			Filed:

				
			March 5, 2005

			
	
			Recorded:

				
			Book 1843, Page 57

			
	
			Lessor:

				
			Eva M. Gooch

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			
	 	 
	
			Dated:

				
			June 17, 2005

			
	
			Filed:

				
			July 14, 2005

			
	
			Recorded:

				
			Book 1868, Page 155

			
	
			Lessor:

				
			Parameno Resources, Ltd.

			
	
			Lessee:

				Chesapeake Exploration Limited Partnership
	
			Description:

				
			SE/4 of Section 11-T17N-R3W

			

 

Force pooled interest acquired pursuant to OCC Pooling Order No. 499615 dated January 6, 2005, entered in Cause CD No. 200408159, the Application of R.E. Blaik, Inc., to force pool the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

Force pooled interest acquired pursuant to OCC Pooling Order No. 521573 dated March 13, 2006, entered in Cause CD No. 200601589, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the SE/4 of Section 11-T17N-R3W, Logan County, Oklahoma.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

60

 

 

NW/4 OF SECTION 11-T17N-R3W

 

Wellbores

 

CORAL #11-1: API #083-23645A

 

SE/4 NW/4 SW/4 NW/4 (692' FSL and 378' FWL) of the drilling and spacing unit comprised of the W/2 NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-5; API #083-23726

 

C NE/4 NW/4 (660' FNL and 660' FEL) of the drilling and spacing unit comprised of the E/2 NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-15; API #083-23806

 

NW/4 SE/4 NW/4 NW/4 (753’ FNL and 742’ FWL) of the drilling and spacing unit comprised of the W/2 NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

CORAL #11-25; API #083-23891

 

SE/4 NW/4 SE/4 NW/4 (935' FSL and 1718' FWL) of the drilling and spacing unit comprised of the E/2 NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			January 16, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 295

			
	
			Lessors:

				
			Charles D. Morrison and Beth Blubaugh Morrison, individually and as Co-Trustees of the Charles D. Morrison Revocable Trust dated March 1, 1982

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			January 18, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 297

			
	
			Lessors:

				
			Jean Haley Griffin, Trustee of the Jean Haley Griffin Family Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			January 29, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 299

			
	
			Lessors:

				
			Wanda Rae Dale, a married person dealing in her sole and separate property   

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

61

 

 

	
			Dated:

				January 29, 2002
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 301

			
	
			Lessors:

				
			Edwin P. Myers, Jr., a married person dealing in his own property   

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			January 29, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 303

			
	
			Lessors:

				
			Charles Graff, as attorney in fact for Ralph Merlin Graff, a married person dealing in his own property   

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			February 1, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 305

			
	
			Lessor:

				
			Norma Lee Lambert

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				January 4, 2002
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 307

			
	
			Lessors:

				
			Doris Earline Dunn

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			February 4, 2002

			
	
			Filed:

				
			July 1, 2002

			
	
			Recorded:

				
			Book 1663, Page 309

			
	
			Lessors:

				
			The Estate of Richard Haley, Deceased, Catherine F. Haley, Executrix

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			September 9, 2002

			
	
			Filed:

				
			September 12, 2002

			
	
			Recorded:

				
			Book 1674, Page 489

			
	
			Lessors:

				
			Kenneth D. Mitchell and Jane E. Mitchell, Co-Trustees of the Kenneth D. Mitchell Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

62

 

 

	
			Dated:

				
			September 9, 2002

			
	
			Filed:

				
			September 12, 2002

			
	
			Recorded:

				
			Book 1674, Page 491

			
	
			Lessor:

				
			Julia D. Taylor, Individually and as Trustee of the Taylor Family Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			February 22, 2003

			
	
			Filed:

				
			February 25, 2003

			
	
			Recorded:

				
			Book 1709, Page 192

			
	
			Lessor:

				
			Jerry Lynn Logan, Trustee of the Jerry Lynn Logan 2000 Revocable Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			February 22, 2003

			
	
			Filed:

				
			February 25, 2003

			
	
			Recorded:

				
			Book 1709, Page 194

			
	
			Lessor:

				
			JoAnn Logan, Trustee of the JoAnn Logan 2000 Revocable Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			April 4, 2003

			
	
			Filed:

				
			June 2, 2003

			
	
			Recorded:

				
			Book 1723, Page 245

			
	
			Lessor:

				
			Carol Morgan Polley and Bruce Morgan, Co-Personal Representatives of the Estate of Arlene Morgan a/k/a C.A. Morgan, Deceased

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			April 4, 2003

			
	
			Filed:

				
			June 2, 2003

			
	
			Recorded:

				
			Book 1723, Page 247

			
	
			Lessor:

				
			Bruce Morgan, a single person

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	
			Dated:

				
			April 4, 2003

			
	
			Filed:

				
			June 2, 2003

			
	
			Recorded:

				
			Book 1723, Page 249

			
	
			Lessor:

				
			Carol Morgan Polley, a married person dealing in her sole and separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				May 14, 2003
	
			Filed:

				
			June 2, 2003

			
	
			Recorded:

				
			Book 1723, Page 251

			
	
			Lessor:

				
			Edward Hastings, a married person dealing in his sole and separate property

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

63

 

 

	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			July 30, 2003

			
	
			Filed:

				
			August 21, 2003

			
	
			Recorded:

				
			Book 1740, Page 679

			
	
			Lessor:

				
			Thuda C. Maguire, Trustee of the Euna Mae Heenan Trust

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			September 16, 2004

			
	
			Filed:

				
			September 27, 2004

			
	
			Recorded:

				
			Book 1817, Page 350

			
	
			Lessor:

				
			Charles Kiley

			
	
			Lessee:

				First Liberty Energy, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				September 16, 2004
	
			Filed:

				September 27, 2004
	
			Recorded:

				
			Book 1817, Page 351

			
	
			Lessor:

				
			Patricia Phillips

			
	
			Lessee:

				First Liberty Energy, Inc.
	
			Description:

				
			NW/4 of Section 11-T17N-R3W, Logan County, Oklahoma

			

 

 

Force Pooled Interest acquired pursuant to OCC Pooling Order No. 498368 dated December 2, 2004, entered in Cause CD No. 200404376, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of (i) the NE/4 NW/4 of Section 11-T17N-R3W as to the Layton (Less Middle Layton), Middle Layton, Misener, Marshall, First Wilcox, Second Wilcox and Oil Creek common sources of supply; and (ii) the E/2 NW/4 of Section 11-T17N-R3W as to the Oswego, Red Fork, Mississippi, Hunton and Viola Dolomite common sources of supply.

 

Force Pooled Interest acquired pursuant to OCC Pooling Order No. 473266 dated March 10, 2003, entered in Cause CD No. 200300523, the Application of Pangaea Exploration Corporation to force pool the drilling and spacing unit comprised of (i) the SW/4 NW/4 of Section 11-T17N-R3W as to the Middle Layton Sand, Layton (Less Middle Layton), Misener, First Wilcox, Marshall, Second Wilcox and Oil Creek; (ii) the W/2 NW/4 of Section 11-T17N-R3W as to the Oswego, Red Fork, Mississippi, Hunton, Viola Dolomite and Arbuckle; and (iii) the NW/4 of Section 11-T17N-R3W - Upper Hoover, Carmichael Sand, Tonkawa and Avant common sources of supply.

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

64

 

 

NW/4 OF SECTION 12-T17N-R3W

 

Wellbores

 

CORAL #12-10: API #083-23727

 

W/2 SE/4 NW/4 NW/4 (990’ FNL and 840’ FWL) of the drilling and spacing unit comprised of the W/2 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

 

CORAL #12-17: API #083-23856

 

SE/4 SE/4 NW/4 (646’ FSL and 447’ FEL) of the drilling and spacing unit comprised of the E/2 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

 

CORAL #12-27: API #083-23848

 

S/2 SW/4 SW/4 NW/4 (230’ FSL and 330’ FWL) of the drilling and spacing unit comprised of the W2 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			January 6, 2004

			
	
			Filed:

				
			January 13, 2004

			
	
			Recorded:

				
			Book 1770, Page 257

			
	
			Lessors:

				
			Minnie Rose Tellaro

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

	
			Dated:

				
			February 4, 2004

			
	
			Filed:

				
			February 24, 2004

			
	
			Recorded:

				
			Book 1782, Page 563

			
	
			Lessors:

				
			Preisciliano Ortega and Virginia Ortega

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			E/2 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

	
			Dated:

				
			April 20, 2004

			
	
			Filed:

				
			May 7, 2004

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

65

 

 

	
			Recorded:

				
			Book 1790, Page 535

			
	
			Lessors:

				
			Ralph M. Robinson and Marlene Robinson

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 and N/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

	
			Dated:

				
			June 18, 2004

			
	
			Filed:

				
			June 23, 2004

			
	
			Recorded:

				
			Book 1799, Page 465

			
	
			Lessors:

				
			Robert Franklin Welch

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

	
			Dated:

				
			July 26, 2006

			
	
			Filed:

				
			August 7, 2006

			
	
			Recorded:

				
			Book 1943, Page 648

			
	
			Lessors:

				
			Preisciliano Ortega and Virginia Ortega

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			E/2 NW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

 

NE/4 OF SECTION 12-T17N-R3W

 

Wellbores

 

CORAL #12-7: API #083-23762

 

NE/4 SW/4 NE/4 NE/4 (721’ FNL and 958’ FEL) of the drilling and spacing unit comprised of the NE/4 Section 12-T17N-R3W, Logan County, Oklahoma

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

66

 

 

Lease Interests

 

	
			Dated:

				
			January 6, 2004

			
	
			Filed:

				
			January 13, 2004

			
	
			Recorded:

				
			Book 1770, Page 255

			
	
			Lessors:

				
			Minnie Rose Tellaro

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			N/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			February 4, 2004

			
	
			Filed:

				
			February 24, 2004

			
	
			Recorded:

				
			Book 1782, Page 557

			
	
			Lessors:

				
			Betty A. Foster, a widow

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			N/2 NE/4, less and except a one-acre tract, 150’ East and West and 290’ North and South, in the SE/corner, Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			April 20, 2004

			
	
			Filed:

				
			May 7, 2004

			
	
			Recorded:

				
			Book 1790, Page 535

			
	
			Lessors:

				
			Ralph M. Robinson and Marlene Robinson

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 and N/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 10, 2004

			
	
			Filed:

				
			June 29, 2004

			
	
			Recorded:

				
			Book 1800, Page 592

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

67

 

 

	
			Lessors:

				
			Johnise G. Liles

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 4, 2004

			
	
			Filed:

				
			July 12, 2004

			
	
			Recorded:

				
			Book 1802, Page 570

			
	
			Lessors:

				
			Steve Alexander

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 4, 2004

			
	
			Filed:

				
			July 12, 2004

			
	
			Recorded:

				
			Book 1802, Page 572

			
	
			Lessors:

				
			Don Alexander

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 10, 2004

			
	
			Filed:

				
			July 12, 2004

			
	
			Recorded:

				
			Book 1802, Page 575

			
	
			Lessors:

				
			John M. Alexander

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

68

 

 

	
			Dated:

				
			July 10, 2004

			
	
			Filed:

				
			August 2, 2004

			
	
			Recorded:

				
			Book 1807, Page 116

			
	
			Lessors:

				
			Jennifer Alexander McClanahan

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 379

			
	
			Lessors:

				
			Larry M. Cross

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2004

			
	
			Filed:

				
			October 27, 2004

			
	
			Recorded:

				
			Book 1822, Page 381

			
	
			Lessors:

				
			David L. Cross

			
	
			Lessee:

				
			First Liberty Energy, Inc.

			
	
			Description:

				
			S/2 NE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

			

 

 

SE/4 OF SECTION 12-T17N-R3W

 

Wellbores

 

CORAL #12-12: API #083-23765

 

N/2 NE/4 SE/4 SE/4 (1210’ FSL and 330’ FEL) of the drilling and spacing unit comprised of the SE/4 of Section 12-T17N-R3W, Logan County, Oklahoma

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

69

 

 

Lease Interests

 

	
			Dated:

				
			July 1, 2004

			
	
			Filed:

				
			July 7, 2004

			
	
			Recorded:

				
			Book 1801, Page 667

			
	
			Lessors:

				
			Kenneth D. Mitchell and Jane E. Mitchell, Co-Trustees of the Kenneth D. Mitchell Trust

			
	
			Lessee:

				
			T.J. Howeth

			
	
			Description:

				
			SE/4 Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			July 1, 2004

			
	
			Filed:

				
			July 7, 2004

			
	
			Recorded:

				
			Book 1801, Page 669

			
	
			Lessors:

				
			Julia D. Taylor, Individually and as Trustee of the Taylor Family Trust

			
	
			Lessee:

				
			T.J. Howeth

			
	
			Description:

				
			SE/4 Section 12-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			July 6, 2004

			
	
			Filed:

				
			July 7, 2004

			
	
			Recorded:

				
			Book 1801, Page 671

			
	
			Lessors:

				
			Nobles Family Limited Partnership

			
	
			Lessee:

				
			T.J. Howeth

			
	
			Description:

				
			SE/4 Section 12-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

70

 

 

SW/4 OF SECTION 12-T17N-R3W

 

Wellbores

 

CORAL #12-11: API #083-23763

 

NW/4 SE/4 NW/4 SW/4 (1968’ FSL and 751’ FWL) of the drilling and spacing unit comprised of the SW/4 of Section 12-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			May 24, 1976

			
	
			Filed:

				
			November 9, 1976

			
	
			Recorded:

				
			Book 692, Page 379

			
	
			Lessors:

				
			Mamie Fogarty and Lorraine S. Fogarty, her husband

			
	
			Lessee:

				
			Bobby J. Darnell

			
	
			Description:

				
			SW/4 Section 12-T17N-R3W, Logan County, Oklahoma

			

 

 

NW/4 OF SECTION 14-T17N-R3W

 

Wellbores

 

CORAL #14-8: API #083-23708

 

E/2 NW/4 NW/4 NW/4 (330’ FNL and 550’ FWL) of the drilling and spacing unit comprised of the NW/4 of Section 14-T17N-R3W, Logan County, Oklahoma

 

Lease Interests

 

	
			Dated:

				
			September 8, 2000

			
	
			Filed:

				
			October 25, 2000

			
	
			Recorded:

				
			Book 1566, Page 149

			
	
			Lessors:

				
			Ralph M. Gooch and wife, Coral Gooch

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

71

 

 

	
			Dated:

				
			September 6, 2000

			
	
			Filed:

				
			October 25, 2000

			
	
			Recorded:

				
			Book 1566, Page 151

			
	
			Lessors:

				
			Richard Harness

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 1, 2000

			
	
			Filed:

				
			October 25, 2000

			
	
			Recorded:

				
			Book 1566, Page 153

			
	
			Lessors:

				
			Marilyn Hafer

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 6, 2000

			
	
			Filed:

				
			December 28, 2000

			
	
			Recorded:

				
			Book 1573, Page 427

			
	
			Lessors:

				
			Norma Covey

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 6, 2000

			
	
			Filed:

				
			December 28, 2000

			
	
			Recorded:

				
			Book 1573, Page 429

			
	
			Lessors:

				
			Esther Tolson

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

72

 

 

	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 6, 2000

			
	
			Filed:

				
			December 28, 2000

			
	
			Recorded:

				
			Book 1573, Page 431

			
	
			Lessors:

				
			Stella M. Gooch

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 18, 2001

			
	
			Recorded:

				
			Book 1575, Page 619

			
	
			Lessors:

				
			Edith P. Shively

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 18, 2001

			
	
			Recorded:

				
			Book 1575, Page 621

			
	
			Lessors:

				
			Tom Bartow

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 18, 2001

			
	
			Recorded:

				
			Book 1575, Page 623

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

73

 

 

	
			Lessors:

				
			Gale T. Bartow

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 26, 2001

			
	
			Recorded:

				
			Book 1576, Page 543

			
	
			Lessors:

				
			Lola Rae Carter

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 26, 2001

			
	
			Recorded:

				
			Book 1576, Page 545

			
	
			Lessors:

				
			Richard Bartow

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			January 31, 2001

			
	
			Recorded:

				
			Book 1576, Page 268

			
	
			Lessors:

				
			William P. Shauger

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			May 24, 2001

			
	
			Filed:

				
			July 27, 2001

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

74

 

 

	
			Recorded:

				
			Book 1606, Page 311

			
	
			Lessors:

				
			Hirzel, Inc.

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 1, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 313

			
	
			Lessors:

				
			Ernest E. Mappes, Trustee of the Lottie Mappes 1980 Trust

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 2, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 315

			
	
			Lessors:

				
			Jay W. Rottman

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 2, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 317

			
	
			Lessors:

				
			Helen Wolfley

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

75

 

 

	
			Dated:

				
			December 22, 2000

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 319

			
	
			Lessors:

				
			Gene Bartow

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 13, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 321

			
	
			Lessors:

				
			Jean Haley Griffin, Trustee of the Jean Haley Griffin Family Trust

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			June 13, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 323

			
	
			Lessors:

				
			Agnes Cawthorne

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	
			Dated:

				
			July 1, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 325

			
	
			Lessors:

				
			Anna Marie Turner and husband, Charles L. Turner

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

76

 

 

	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			July 1, 2001

			
	
			Filed:

				
			July 27, 2001

			
	
			Recorded:

				
			Book 1606, Page 327

			
	
			Lessors:

				
			Florentine Sigler

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 6, 2001

			
	
			Filed:

				
			August 20, 2001

			
	
			Recorded:

				
			Book 1610, Page 308

			
	
			Lessors:

				
			Marilyn Smith Branch, Trustee of the Marilyn Smith Branch Trust

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 6, 2001

			
	
			Filed:

				
			August 20, 2001

			
	
			Recorded:

				
			Book 1610, Page 310

			
	
			Lessors:

				
			Marilyn Smith Branch, Trustee of the Smith Family Trust

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 6, 2001

			
	
			Filed:

				
			September 14, 2001

			
	
			Recorded:

				
			Book 1614, Page 532

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

77

 

 

	
			Lessors:

				
			Charles D. Morrison and Beth Blubaugh Morrison, individually and as Co-Trustees of the Charles D. Morrison Revocable Trust dated March 1, 1982

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			September 11, 2001

			
	
			Filed:

				
			September 28, 2001

			
	
			Recorded:

				
			Book 1616, Page 346

			
	
			Lessors:

				
			James J. Kamp

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2001

			
	
			Filed:

				
			September 28, 2001

			
	
			Recorded:

				
			Book 1616, Page 350

			
	
			Lessors:

				
			Dorothy Jo Seiver

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2001

			
	
			Filed:

				
			September 28, 2001

			
	
			Recorded:

				
			Book 1616, Page 352

			
	
			Lessors:

				
			Barbara Kay Micklitz

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

78

 

 

	
			Dated:

				
			August 17, 2001

			
	
			Filed:

				
			September 28, 2001

			
	
			Recorded:

				
			Book 1616, Page 354

			
	
			Lessors:

				
			Estate of Richard W. Haley, Deceased, Kathryn Haley, Executrix

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2001

			
	
			Filed:

				
			October 16, 2001

			
	
			Recorded:

				
			Book 1619, Page 87

			
	
			Lessors:

				
			Mike Seiver, a married person dealing in his sole and separate property

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			
	 	 
	 	 
	
			Dated:

				
			August 28, 2001

			
	
			Filed:

				
			October 23, 2001

			
	
			Recorded:

				
			Book 1619, Page 236

			
	
			Lessors:

				
			David Seiver

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			NW/4 Section 14-T17N-R3W, Logan County, Oklahoma

			

 

 

SW/4 OF SECTION 6-T17N-R2W

Wellbores

 

CORAL #30; API #083-23966-00

 

SE/4 SW/4 NW/4 SW/4 (1984' FSL and 430' FWL) of the drilling and spacing unit comprised of Lot 6, Lot 7, and the West 22.4 acres of the SW/4 of Section 6-T17N-R2W, Logan County, Oklahoma

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

79

 

 

Lease Interests

 

	
			Dated:

				August 13, 2008
	
			Filed:

				
			August 22, 2008

			
	
			Recorded:

				
			Book 2087, Page 241

			
	
			Lessors:

				
			Suzanne Tellaro Million

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			Lots 6 and 7 and the West 22.40 acres of the E/2 SW/4 of Section 6-T17N-R2W,

			
	 	Logan County, Oklahoma
	 	 
	
			Dated:

				
			March 9, 2011

			
	
			Filed:

				
			April 5, 2011

			
	
			Recorded:

				
			Book 2241, Page 110

			
	
			Lessors:

				
			Von C. Sanders

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			Lots 6 and 7 and the West 22.40 acres of the E/2 SW/4, Section 6-T17N-R2W,

			
	 	
			Logan County, Oklahoma

			
	 	 
	
			Dated:

				
			May 12, 2011

			
	
			Filed:

				
			May 23, 2011

			
	
			Recorded:

				
			Book 2249, Page 114

			
	
			Lessors:

				
			William L. and Gayle M. Grubbs, husband and wife

			
	
			Lessee:

				
			Easton Enterprises, Inc.

			
	
			Description:

				
			All of Lots 6 and 7 and the West 22.40 acres of the E/2 SW/4 of Section 6-T17N-R2W, Logan County, Oklahoma

			

 

 

SE/4 OF SECTION 1-T17N-R3W

Wellbores

 

CORAL #1-31; API #083-206941

 

NE/4 SE/4 NW/4 SE/4 (760' FNL and 1' FEL) of the drilling and spacing unit comprised of the W/2 SE/4 of Section 1-T17N-R3W, Logan County, Oklahoma. Being 80 acres.

 

Lease Interests

 

	
			Dated:

				January 15, 2008
	
			Filed:

				February 10, 2010
	
			Recorded:

				
			Book 2171, Page 295

			
	
			Lessors:

				
			Don Samuel Davis, a married man dealing in his sole and separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 1-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				February 8, 2010
	
			Filed:

				March 1, 2010
	
			Recorded:

				
			Book 2173, Page 580

			
	
			Lessors:

				
			James R. Beery, a married man dealing in his sole and separate property

			

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

80

 

 

	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4, Section 1-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				April 14, 2010
	
			Filed:

				May 12, 2010
	
			Recorded:

				
			Book 2184, Page 533

			
	
			Lessors:

				
			William L. and Gayle M. Grubbs, husband and wife

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 1-T17N-R3W, Logan County, Oklahoma

			
	 	 
	
			Dated:

				December 14, 2011
	
			Filed:

				January 24, 2012
	
			Recorded:

				
			Book 2294, Page 184

			
	
			Lessors:

				
			Charles G. Beery, a married man dealing in his sole and separate property

			
	
			Lessee:

				Easton Enterprises, Inc.
	
			Description:

				
			SE/4 of Section 1-T17N-R3W, Logan County, Oklahoma

			

 

Including wellbore only of the following:

 

CORAL #29-1; API #083-23928

S/2 N/2 SW/4 NE/4 (890' FSL and 660' FWL) of the drilling and spacing unit comprised of the W/2 NE/4 of Section 1-T17N-R3W, Logan County, Oklahoma Force Pooled Interest acquired pursuant to OCC Pooling Order No. 579853 dated October 27, 2010, entered in Cause CD No. 201003630, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the W/2 NE/4 of Section 1, T17N, R3W, Logan County, Oklahoma

 

RIVER #1-1; API #083-23886

 

E/2 E/2 SE/4 NW/4 (660' FSL and 2314' FWL) of the drilling and spacing unit comprised of the E/2 NW/4 of Section 1-T17N-R3W, Logan County, Oklahoma Force Pooled Interest acquired pursuant to OCC Pooling Order No. 557372 dated July 28, 2008 entered in Cause CD No. 200803939, the Application of First Liberty Energy, Inc. to force pool the drilling and spacing unit comprised of the SE/4 NW/4; E/2 NW/4 and NW/4 of Section 1, T17N, R3W, Logan County, Oklahoma

 

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

81

 

 

EXHIBIT “A” – Logan County, Oklahoma

 

Part 2

APHE – CIA 2022 – Exhibit “C”

Senior Secured ConvertiblePromissory Note – Exhibit “F”

Form of Mortgage Agreement – Exhibit “A”

82ex_353537.htm

 

Exhibit 10.4

 

 

CONTRACTUAL INVESTMENT AGREEMENT

 

This Contractual Investment Agreement (“Agreement”) is made this 25th day of January, 2022, by and between Alpha Energy, Inc. (“the Company”), a publicly traded Colorado Corporation (Colorado filing number 2013155940) at 4162 Meyerwood Dr., Houston, TX. 77025, USA and ________________________ hereto and who are hereinafter “Investors”, each, and all of whom has entered into this Agreement as an “arm’s length” Agreement between the parties hereto, and not as a result of any offer made by the Company to them for the purchase and sale of any of the Company’s securities. This Agreement is made by and between the Company and the Investors, for the reasons clearly set forth and for no other.

 

WHEREAS, the Company, as a publicly traded and fully reporting company under Securities and Exchange Commission (“SEC”) Rule 12 (g), and as a result thereof is required to file, on an annual basis, certain quarterly and annual reports, specifically denominated as “10 Qs” and “10 Ks, to remain in current reporting status, and WHEREAS, the Company has certain mandatory past filings due under this regulatory regime, such filings to be adequately completed requiring significant expenditures in accounting, auditing, legal, EDGAR filing and administrative expenses, and WHEREAS, the Company has filings to be adequately completed requiring significant expenditures in accounting, auditing, legal, administrative expenses, and WHEREAS the Company shall incur significant start up, acquisition, and operational costs, which, when taken together with the aforedescribed expenses, are expected to approximate $5,000,000, and WHEREAS, Investors are willing jointly to provide such funding as is set forth above in the amount of $5,000,000 to the Company, in terms of $___________ contribution made by the Investors, jointly and severally, such contributions totaling the needed $5,000,000 to complete the aforementioned operational and filing expenses, and WHEREAS, the parties hereto have agreed that as consideration for the provision of the needed funding amount of $5,000,000. Investors shall receive a Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share to Initial Public Offering price. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the Investors, jointly and severally, for a total receipt of the needed $5,000,000.

 

 

	
			Initials

				 	
			Initials

				 
	 	 	 	APHE – CIA 2021

 

1

 

 

NOW THEREFORE, the parties hereto agree as follows:

 

WARRANTIES OF INVESTORS

 

Investors hereby warrant that they have full authority and legal capacity to lawfully provide to the Company the needed $5,000,000 required for the Company’s completion of all matters requisite for the aforementioned mandated SEC filings and acquisition and operational costs, and that they will do so in accordance with the terms of this Agreement, and that the full $5,000,000 constitutes funds of their own, and they further warrant that the funds are from their sole origin and come from no other source.

 

Investors further warrant that while they have had available to them all public information lodged with the SEC in reference to the Company, these funds are being provided for the specific purpose referenced in this Agreement, namely the provision of funds for the needed SEC filings, and acquisition and operational costs and not as a general investment in the Company. The investment described herein is made for the sole purpose described herein.

 

Investors further warrant that appurtenant to this Agreement they have not received now, nor shall they ever seek to receive, any “non-public” information in reference to the Company in relation to this Agreement or at any other time.

 

Investors further warrant that they shall take reasonable steps to ensure that this $5,000,000 investment shall be used by the Company for the purposes recited herein relating to the aforementioned mandated filings and acquisition and operational costs and for no other purpose.

 

WARRANTIES OF THE COMPANY

 

The Company warrants that is a duly formed and licensed corporation, formed in the State of Colorado and currently in good standing in all respects, bearing the Colorado filing number 2013155940 and that it is fully compliant with reference to all filings required by the State of Colorado.

 

 

	
			Initials

				 	
			Initials

				 
	 	 	 	APHE – CIA 2021

2

 

 

The Company also warrants that it is a fully reporting Rule 12 (g) company under the aforesaid SEC Rule and that its securities are currently traded in the public market and that it is in the process of completing all mandated filings with the SEC, the completion of such filings being the complete and sole reason for it having entered into this Agreement.

 

The Company warrants that it has full authority to issue $5,000,000 in the form of a Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share to Initial Public Offering price. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the Investors, jointly and severally, for a total receipt of the needed $5,000,000. and that the shares so Contemplated for issuance by this Agreement and that the issuance of such shares as are contemplated hereby shall breach no pre-existing agreement or condition. The Company further warrants that the $5,000,000 funding contemplated by this Agreement shall be used exclusively for the accounting, auditing, legal, EDGAR filing, and administrative costs involved in completing the mandated filings with the SEC, and for the aforementioned acquisition and operational costs, and for no other purpose. The Company assumes full responsibility to ensure that these funds are used for this and no other purpose and shall allow the Investors to examine the relevant Company records to determine and ensure that the funds have been so exclusively used.

 

OBLIGATIONS OF THE INVESTORS

 

Upon signature to this Agreement, Investors, jointly, shall be obligated to provide to the Company $5,000,000 USD (in total or in part pursuant to the amount subscribed herein) in good and free funds, and shall, forthwith, cause this amount of funding to be wired to the Company in accordance with the details in the enumerated wiring instructions set forth in Exhibit “B” hereto.

 

Once the funds described above have been so wired to the credit of the Company, Investors shall have fully completed and fulfilled all of their obligations under this Agreement and shall, as a result, be issued a dually executed Convertible Promissory Note.

 

 

	
			Initials

				 	
			Initials

				 
	 	 	 	APHE – CIA 2021

3

 

 

OBLIGATIONS OF THE COMPANY

 

Once the $5,000,000 funding amount has been received by the Company, the Company shall have the obligation to cause its Treasurer to issue the Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share to Initial Public Offering price. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the Investors, jointly and severally, for a total receipt of the needed $5,000,000.

 

MISCELLANEOUS PROVISIONS

 

GOVERNING LAW: This Agreement shall be interpreted and enforced in accordance with the Laws of the State of Colorado, in all respects as to both its making and performance, and any and all disputes arising from, or relating to, this Agreement shall be interpreted, in all respects, under the laws of the State of Colorado.

 

JURISDICTION: All parties hereto agree that this Agreement is to be subject to the jurisdiction of the State of Colorado in all respects, including personal jurisdiction, and all parties affixing their signatures hereto agree, by the affixing of such signatures, that they are doing business in Colorado for the purpose of personal jurisdiction as required by the laws of the State of Colorado.

 

VENUE: All parties hereto agree, jointly and severally, that the appropriate venue for the resolution of any disputes which may arise under this Agreement shall be that of Adams County, Colorado, whether any such proceeding is lodged in any Court of the State of Colorado in Adams County or in any Court of the United States found at that location.

 

SUPERSEDENCE: This Agreement, when signed by the parties, supersedes any and all previous agreements by and between the parties hereto, whether oral or in writing. This Agreement constitutes the full and complete agreement by and between the parties hereto.

 

NOTICES: Any and all notices made by any of the parties to this Agreement may be made by regular U.S. Mail, certified U.S. Mail, express delivery, fax transmission, or by properly sent electronic (“email’) transmission. Any and all such notices shall be remitted to the addresses reflected herein for each and all of the parties. The Notices to be remitted to any of the Investors herein shall be sent to the actual address, facsimile address, and/or electronic (“email”) as any and all Investors shall set such addresses forth on Exhibit “A” hereto.

 

 

	
			Initials

				 	
			Initials

				 
	 	 	 	
			APHE – CIA 2021

			

4

 

 

NON-ASSIGNABILITY: This Agreement may not be assigned by any party hereto to any third party without the express written permission of all parties hereto. Upon such agreement, any assignment so made shall be deemed valid.

 

NON- WAIVER OF BREACH: No failure by any party hereto to enforce any singular obligation under this Agreement shall prejudice and such party’s right to enforce any other right or obligation under this Agreement.

 

ARM’S LENGTH AGREEMENT: This Agreement as made by and between the parties hereto is made only for the purposes found within the four corners of this Agreement, and for no other reason or other intended purpose.

 

THIS AGREEMENT MAY BE EXECUTED IN IDENTICAL COUNTERPARTS, such counterparts shall be deemed to constitute one and the same Agreement,

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the

 

25th day of January 2022.

 

	
			Alpha Energy, Inc.

				
			Investor

			
	
			4162 Meyerwood Dr.

				 
	
			Houston, Texas 77025

				 
	 	 
	 	
			(More fully identified on Exhibit “A”)

			
	
			By: _________________________________

				
			By: _________________________________

			
	
			John Lepin, CFO

				 
	
			Alpha Energy, Inc.

				 

 

APHE – CIA 2021

5

 

 

Exhibit “A”

 

SUBSCRIPTION AGREEMENT

Alpha Energy, Inc.

(January 2022)

 

The purchase of a Convertible Note involves a high degree of risk. Only Investors who are able to afford the risk of loss of their entire investment should purchase a Convertible Note.

 

These securities have not been registered with the U.S. Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered in reliance on exemptions from registration provided in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and preemption from the registration and qualification requirements (other than provisions) of applicable state laws under the National Securities Markets notice filing and fee Improvement Act of 1996.

 

These securities have not been approved or disapproved by the SEC or any state and other regulatory authority, nor has the SEC or any state and other regulatory authority passed on the accuracy and adequacy of this disclosure document or endorsed the merits of this offering. Any representation to the contrary is a criminal offense.

 

 

 

This Subscription Agreement (“Agreement”) constitutes the undersigned’s irrevocable offer to purchase from Alpha Energy, Inc., a Colorado corporation (the “Company”), an convertible promissory note (the “Convertible Note”) in the principal amount set forth on the signature page of this Agreement, subject to the terms and conditions set forth in this Agreement. The undersigned hereby delivers to the Company the full purchase price for the subscription for the Shares in the form of a check or wire transfer to the wiring instructions attached as Exhibit “B”. The undersigned understands and agrees that this Subscription Agreement constitutes the binding obligation of the undersigned to deliver the full purchase price to the Company for the portion of the subscription accepted by the Company. The undersigned will be notified by the Company whether, and to what extent, the undersigned’s subscription has been accepted. The Company reserves the right in its sole discretion to reject all or part of any subscription. If a subscription is not accepted in whole for any other reason, the subscription amount that was not accepted will be returned to the undersigned without interest. The undersigned understands and agrees that this subscription is irrevocable. On execution by both parties, this Agreement shall become a bilateral agreement binding on both the undersigned and the Company. Each part of this Agreement must be completed by the undersigned and, by execution below, the undersigned acknowledges and understands that the Company is relying on the accuracy and completeness hereof in complying with the obligations under applicable securities laws.

 

Convertible Notes

 

The Company was originally formed under the laws of the state of Colorado as a limited liability company and subsequently converted to a Colorado corporation. Copies of the Company’s articles of incorporation, bylaws, and shareholder agreements will be provided to the undersigned upon request. The Company is offering the Convertible Notes as investment securities only and not with a view to, or for resale in connection with, any distribution thereof. These securities are “restricted” (within the meaning of the Securities Act) and are subject to limitations on transfer as set forth in state and federal laws and in the articles of incorporation, bylaws, and shareholder agreements. Investors in the Convertible Notes will be creditors of the Company and on conversion of the Convertible Note they will be issued shares of the Company’s common stock (the “Common Stock”) and become stockholders of the Company “Stockholders”).

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

6

 

 

Suitability Information

 

1. Representations of Subscriber. The undersigned hereby represents and warrants as follows:

 

(a)    The undersigned has received and read the Company’s business plan and power point presentation (the “Offering Materials”), together with additional information and documentation provided pursuant thereto, including information furnished on his request. The undersigned understands and acknowledges that such information contains certain forward- looking statements and information relating to the Company that are based on the beliefs of management, as well as assumptions made by and information currently available to management, and that when used in the offering information, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” and similar expressions, as they relate to the Company and its management, are intended to identify forward-looking statements. The undersigned understands and acknowledges that these statements reflect the current view of the Company respecting future events and are subject to certain risks, uncertainties, and assumptions, including the risks and uncertainties noted, and that, should one or more of such risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the Offering Materials as anticipated, believed, estimated, expected, and intended. The undersigned understands the risks associated with a business enterprise with no revenue and limited capitalization in a highly competitive business characterized by rapid technological change.

 

(b)    The undersigned has had sufficient interactions with the Company’s management and has been provided with supporting documentation, if requested, which he has read and understands, in order to make an informed investment decision. The undersigned is basing his decision to invest solely on the information provided and has not relied on any other representations made by the Company and its affiliates.

 

(c)    The undersigned understands that an investment in a Convertible Note is speculative and involves numerous significant risks, the occurrence of any one of which could result in the loss of his entire investment. The undersigned is fully cognizant of, and understands all of, the risks relating to a purchase of a Convertible Note, including those risks set forth in the Offering Materials.

 

(d)    The undersigned understands that the Company is in the process of raising up to $5,000,000 for the purposes set forth in the Offering Materials and for general working capital.

 

(e)    The undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to his individual net worth, and his investment in a Convertible Note will not cause his overall commitment to become excessive.

 

(f)    The undersigned has adequate means of providing for his financial requirements, both current and anticipated, and has no need for liquidity in an investment in a Convertible Note.

 

(g)    The undersigned was at no time solicited by any leaflet, public promotional meeting, circular, newspaper and magazine article, internet contact, radio and television advertisement, and any other form of general advertising and solicitation in connection with the offer, sale, and purchase of a Convertible Note through this Agreement.

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

7

 

 

(h)    The undersigned can bear and is willing to accept the economic risk of losing his entire investment.

 

(i)    The undersigned is acquiring a Convertible Note for his own account and for investment purposes only and has no present intention, agreement, and arrangement for the distribution, transfer, assignment, resale, and subdivision of a Convertible Note or of the Common Stock, either currently or after the passage of a fixed or determinable period or on the occurrence or nonoccurrence of any predetermined event and circumstance.

 

(j)    The undersigned has such knowledge and experience in financial and business matters that he is capable of evaluating the Company, the proposed activities thereof, and the risks and merits of investing in a Convertible Note and is not using a purchaser representative (as defined in Regulation D) in connection with the evaluation of such risks and merits, or the undersigned and his purchaser representatives listed below, together, have such knowledge and experience in financial and business matters that they are capable of evaluating the Company, the proposed activities thereof, and the risks and merits of investing in a Convertible Note.

 

(k)    If a resident of the United States, the undersigned is a resident of the state set forth on the signature page of this Agreement and has a principal residence within such state, maintains a driver’s license and voter registration only within such state, pays income taxes (when applicable) only to such state, and intends to remain a citizen of such state for the foreseeable future, or if the undersigned cannot make this representation, his reason is satisfactory to the Company, in its sole and absolute discretion.

 

(l)    The undersigned is an “accredited investor” as defined under Rule 501 of Regulation D of the Securities Act, as summarized in Exhibit “A”.

 

(m)    The undersigned understands the offering has not been registered under the Securities Act and applicable state and other securities laws, that the Convertible Notes are subject to significant restrictions on transfer under such securities laws, and that the undersigned cannot sell, distribute, and otherwise transfer the Convertible Note or the Common Stock unless the Convertible Note or Common Stock is registered under the Securities Act and applicable state and other securities laws or unless an exemption from registration is available. The undersigned may, therefore, be required to hold the Convertible Note until maturity and, if converted, the Common Stock for an indefinite period.

 

(n)    The undersigned acknowledges that neither the SEC nor the securities commission of any state or other federal agency has made any determination as to the merits of purchasing the Convertible Notes.

 

(o)    All information that the undersigned has provided to the Company and its agents and representatives concerning his suitability to invest in the Company is complete, accurate, and correct as of the date of the signature on the last page of this Agreement, including information concerning his personal financial affairs and business position and the knowledge and experience of the undersigned and his advisers.

 

(p)    The undersigned acknowledges that this Agreement may be accepted or rejected, in whole or in part, by the Company and that, to the extent the subscription may be rejected, the accompanying subscription payment will be refunded without payment of interest and without deduction of expenses.

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

8

 

 

(q)    The undersigned acknowledges and agrees that no portion of the Offering Materials may be reproduced and redistributed, except to his advisers, without the Company’s prior written consent, which consent may be withheld and conditioned in the Company’s sole discretion. The undersigned will not, without the Company’s prior written permission and consent, use any of the information in the Offering Materials for any purpose whatsoever other than evaluating a potential purchase of a Convertible Note.

 

(r)    Neither the undersigned nor any of his affiliates will effect any transactions in the Convertible Note or Common Stock while in possession of material, nonpublic information regarding the Company.

 

2.    Additional Information. The undersigned acknowledges that he has previously been advised of the opportunity to review all of the pertinent facts concerning the Company and to obtain any additional information that he may request, to the extent the Company possesses or can obtain such information without unreasonable effort and expense. The undersigned has been provided with all materials and information requested by him and his representatives, including any information requested to verify any information furnished, and he has been provided the opportunity for direct communication with the Company and its representatives regarding the purchase made hereby, including the opportunity to ask questions of and receive answers from the Company’s management.

 

 

3    Representations Regarding Exemptions and Restrictions on Transfer.

 

(a)    In connection with the undersigned’s acquisition of a Convertible Note, he represents that the Convertible Note is being acquired without a view to, or for resale in connection with, any distribution of the Convertible Note or the Common Stock and any interest therein without registration and other compliance under the Securities Act and that he has no direct or indirect participation in any such undertaking or in the underwriting of such an undertaking.

 

(b)    The undersigned acknowledges that the Convertible Note must be held and may not be sold, transferred, and otherwise disposed of for value unless subsequently registered under the Securities Act or an exemption from such registration is available; the Company is under no obligation to register the Convertible Note or the Common Stock under the Securities Act or under Section 12 of the Securities Exchange Act of 1934, as amended, except as expressly agreed to in writing by the Company; no assurance is given that the exemption provided by Rule 144 under the Securities Act and any other exemption will be available; and the Convertible Note and certificate, if any, representing the Common Stock and the Company’s stock transfer records will bear a legend listing the restriction on the sale of the Convertible Note and Common Stock.

 

(c)    The undersigned understands that the Convertible Note and the Common Stock have not been registered, but they are being acquired by reason of a specific exemption under the Securities Act as well as under certain state statutes for transactions by an issuer not involving any public offering and that any disposition of the Convertible Note may, under certain circumstances, be inconsistent with this exemption and may make the undersigned an “underwriter” within the meaning of the Securities Act.

 

(d)    The undersigned understands that the resale of the Convertible Note or Common Stock must be effected in reliance on exemptions from registration under the Securities Act and applicable state securities laws. The undersigned understands that such an exemption may not be available and, in such case, the undersigned would not be able to resell the Convertible Note and Common Stock held.

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

9

 

 

4.    Indemnity. The undersigned hereby agrees to indemnify the Company, the Company’s controlling persons, and any person participating in the offering and to hold them harmless from and against all liability, damage, cost, and expense (including reasonable attorneys’ fees) incurred on account of and arising out of:

 

(a)    any inaccuracy in the undersigned’s declarations, representations, and warranties set forth herein or made by him to the Company in connection with his subscription;

 

(b)    the disposition of the Convertible Note and the Common Stock that the undersigned will receive, contrary to his declarations, representations, and warranties set forth herein and to the provisions of the articles of incorporation, bylaws, and shareholder agreements; and

 

(c)    any action, suit, and proceeding based on: (i) the claim that said declarations, representations, and warranties made by the undersigned were inaccurate and misleading or otherwise cause for obtaining damages and redress from the Company; (ii) the disposition of the Convertible Note or Common Stock contrary to the terms hereof; and (iii) the breach by the undersigned of any part of this Agreement.

 

5.    Setoff. Notwithstanding the provisions of the last preceding section and the enforceability thereof, the undersigned hereby grants to the Company the right to a setoff against any amounts payable by the Company to the undersigned, for whatever reason, of all damages, costs, and expenses (including reasonable attorneys’ fees) that are incurred on account and arising out of any of the items referred to in clauses (a) through (c) of the last preceding section.

 

6.    Miscellaneous. The undersigned further understands, acknowledges, and agrees that:

 

(a)    This Agreement shall be construed in accordance with, and governed by, the laws of the state of Colorado.

 

(b)    This Agreement constitutes the entire agreement between the parties respecting the subject matter hereof.

 

(c)    Notwithstanding any of the representations, warranties, acknowledgments, and agreements made herein by the undersigned, he does not waive any rights granted to him under federal and state securities laws.

 

(d)    This Agreement does not entitle the undersigned to any rights as a holder of the Convertible Note or Common Stock purchasable hereunder for which he has not fully paid.

 

(e)    All subscription payments should be made payable to “Alpha Energy, Inc.” The Company will thereafter deliver the Convertible Note subscribed for pursuant to this Agreement.

 

(Subscription details, signatures, and contact information on following page.)

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

10

 

 

Alpha Energy, Inc.

SUBSCRIPTION AGREEMENT COUNTERPART SIGNATURE PAGE

Subscription Details

 

 

The undersigned hereby subscribes for the Convertible Note set forth below and agrees to be bound by the terms of this Subscription Agreement:

 

Principal Amount of Convertible Note Subscribed For         $413,206.18

 

 

Subscriber:

 

	 	 	 
	Full Name of Person or Entity	 	Date
	 	 	 
	 	 	 
	Signature of Person or Entity Authorized Representative	 	Signature of Joint Subscriber If Any
	 	 	 
	 	 	 
	Street Address	 	Title of Authorized Representative Signing for Entity
	 	 	 
	 	 	 
	City, State, and Zip	 	Tax Identification or Social Security Number
	 	 	 
	 	 	 
	Email Address   	 	Daytime Telephone Number

 

	Title to be held as follows:	☐         Community Property	☐         Joint Tenants, with Right of Survivorship
	 	 	 
	 	☐         Tenants in Common	☐         Separate Property
	 	☐         Tenants by the Entirety	 
	 	☐         Other (corporation, single person, trust, etc., please indicate)

 

Purchaser Representatives, if any:

 

	 	 	 
	Full Name	 	Full Name
	 	 	 
	 	 	 
	Number and Street   	 	Number and Street   
	 	 	 
	 	 	 
	City, State, and Zip	 	City, State and Zip Code

 

ACCEPTANCE OF SUBSCRIPTION

 

The foregoing subscription is hereby accepted this ___ day of _____ 2022.

 

ALPHA ENERGY, INC.

 

By:______________________________________________

Name: John F. Lepin                                             

Its: CFO                                                               

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

11

 

 

Please complete this certificate if you are a corporation, general or limited partnership, limited liability company, or trust.

 

CERTIFICATE OF PARTNERSHIP, CORPORATION, OR OTHER ENTITY

 

 

 

The undersigned,                  (“Subscriber”), a          [insert type of entity, i.e., partnership, corporation, etc.] organized under the laws of the state of                   , with its principal offices located at the address set forth below, hereby certifies as follows to induce Alpha Energy, Inc. (the “Company”) to accept the undersigned’s offer to purchase a secured convertible promissory note (“Convertible Note”):

 

1.    Pursuant to valid and legally binding documents filed at the time and in the manner required by the laws of the state under which Subscriber was organized as stated above, Subscriber was formed on ______________.

 

2.    Subscriber wasorganized to engage in the business of _____________________________. Since its organization, Subscriber’s business activities have included the following: _________________________.

 

3.    Subscriber: (a) was not organized or reorganized for the specific purpose of acquiring the Convertible Note; and (b) has made substantive and substantial investments before the date hereof, and each beneficial owner thereof has and will share in the same proportion in each investment.

 

4.    The offer to purchase the Convertible Note to be sold by the Company has been approved by the governing authority of Subscriber in accordance with the power vested in it by applicable law and the documents under which Subscriber was organized and exists.

 

5.    Subscriber has determined that the purchase of the Convertible Note is consistent with its purposes and policies, is of benefit to it, and involves risks that it can reasonably bear.

 

6.    If Subscriber is a trust, in an attachment hereto please identify each grantor and beneficiary and indicate the circumstances under which the trust is revocable by the grantor.

 

7.    On request of the Company, Subscriber shall deliver a certified copy of resolutions duly adopted by the board of directors, general partners, trustees, or other governing authority of Subscriber and provide further evidence of the authority and power of Subscriber to make the investment described herein.

 

The undersigned has caused this document to be executed by its representative, hereunto duly authorized as of the 25th day of January 2022.

 

 

	Address:	 	Name of Subscriber
	 	 	 
	 	 	 
	 	 	Signature of Authorized Signatory
	 	 	 
	 	 	 

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

12

 

 

EXHIBIT “A” TO SUBSCRIPTION AGREEMENT

 

Accredited Investor as defined in § 230.501 of the Securities Act of 1933:

 

	 	
			(1)

				
			Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Securities Act; Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Securities Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investor.

			

 

	 	
			(2)

				
			Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940.

			

 

	 	
			(3)

				
			Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

			

 

	 	
			(4)

				
			Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

			

 

	 	
			(5)

				
			Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating net worth under this paragraph (5):

			

 

	 	
			(a)

				
			The person’s primary residence shall not be included as an asset;

			

 

	 	
			(b)

				
			Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and

			

 

	 	
			(c)

				
			Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability.

			

 

	 	
			(6)

				
			Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

			

 

	 	
			(7)

				
			Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and

			

 

	 	
			(8)

				
			Any entity in which all of the equity owners are accredited investor.

			

 

 

APHE – CIA 2021 – Exhibit “A”

Subscription Agreement - Exhibit “A”

13

 

 

Exhibit “B”

PAYMENT INSTRUCTIONS

 

 

If by Wire:

 

	
			Bank

				
			:

				
			Amegy Bank

			
	 	 	
			1717 W. Loop S.

			
	 	 	
			Houston, TX. 77027

			
	 	 	 
	
			ABA Routing No.

				
			:

				
			113011258

			
	 	 	 
	
			For Further Credit To

				
			:

				
			Alpha Energy, Inc.

			
	 	 	 
	
			Account No.

				
			:

				
			5795799005

			

 

 

If by Mail: 

 

Attn: John Lepin

4162 Meyerwood Drive

Houston, TX 77025

 

 

 

PLEASE SIGN, SCAN AND EMAIL THE SUBSCRIPTION AGREEMENT TO 

jlepin@alpha-energy.us

 

 

APHE – CIA 2021 – Exhibit “B”

Payment Instructions

14

 

 

 

APHE – CIA 2021 – Exhibit “C”

15

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